Inventors Coworker Networks and Innovation

Sabrina Di Addario, Zhexin Feng and Michel Serafinelli
Additional contact information
Sabrina Di Addario: Bank of Italy
Zhexin Feng: King’s College London
Michel Serafinelli: King's College London
Authors registered in the RePEc Author Service: Arindrajit Dube

No 2524, RF Berlin - CReAM Discussion Paper Series from Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM)

Abstract: This paper presents direct evidence on how firms' innovation is affected by access to knowledgeable labor through co-worker network connections. We use a unique dataset that matches patent data to administrative employer-employee records from "Third Italy"-- a region with many successful industrial clusters. Establishment closures displacing inventors generate supply shocks of knowledgeable labor to firms that employ the inventors' previous co-workers. We estimate event-study models where the treatment is the displacement of a "connected" inventor (i.e., a previous coworker of a current employee of the focal firm). We show that the displacement of a connected inventor significantly increases the hiring of connected inventors. Moreover, the improved access to knowledgeable workers raises firms' innovative activity. We provide evidence supporting the main hypothesized channel of knowledge transfer through firm-to-firm labor mobility by estimating IV specifications where we use the displacement of a connected inventor as an instrument to hire a connected inventor. Overall, estimates indicate that firms exploit displacements to recruit connected inventors, and the improved capacity to employ knowledgeable labor within the network increases innovation.

Keywords: social connections; firm-to-firm labor mobility; patents; establishment closures (search for similar items in EconPapers)
JEL-codes: J20 J24 J62 O30 (search for similar items in EconPapers)
Date: 2025-06
New Economics Papers: this item is included in nep-inv and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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