Labor Mobility Foster Innovation? Evidence from Sweden Pontus Braunerhjelm, Ding Ding and Per Thulin Royal Institute of Technology Department of Industrial

Labor Mobility Foster Innovation?Evidence from Sweden

Pontus Braunerhjelm, Ding Ding and Per Thulin

Royal Institute of Technology

Department of Industrial Economics and Management

Structure of the Presentation

Why is this interesting? (Motivation)

Previous Research

Hypotheses (Research Question)

Methodology and Data

Results (Tesing the Hypotheses)


Firm

Labor Market

Firm

Firm

Firm

Firm

FirmFirm

Firm

Firm

Firm

Firm

Firm


Firm

Labor Market

Firm

Firm

Firm

Firm

FirmFirm

Firm

Firm

Firm

Firm

Firm

Firm


Firm

Labor Market

Firm

Firm

Firm

Firm

FirmFirm

Firm

Firm

Firm

Firm

Firm

Patenting FirmNon-Patenting

Firm

Firm


Firms

Patenting Firms

Non-Patenting

Firms

Patenting Firms

Non-Patenting

FirmsTurnover from Firm’s perspective


Firms

Patenting Firms

Non-Patenting

Firms

Patenting Firms

Non-Patenting

Firms

Difference?

What if the job switching cross region?


Firms

Patenting Firms

Non-Patenting

Firms

Patenting Firms

Non-Patenting

Firms

?Difference?

What if the job switching cross region?


Firms

Patenting Firms

Non-Patenting

Firms

Patenting Firms

Non-Patenting

Firms

?Difference?

What kind of workers we focus ?

Defined: R&D WorkersJob Function as Professional and Technicians and associate professional

Tertiary Education worker in Nature, Technical ， Agriculture or Health Science

Total Employment

According to Swedish Standard Classification of Occupations (SSYK).

According to Swedish Educational Terminology (SUN2000).

Job Function as Professional and Technicians and associate professional

Tertiary Education worker in Nature, Technical ， Agriculture or Health Science

Total Employment

Defined: R&D WorkersAccording to Swedish Standard Classification of Occupations (SSYK).

According to Swedish Educational Terminology (SUN2000).

Defined: R&D Workers

Support Worker ：

• Job Function as Technicians and associate professionals (head group NO.3)

• Hold at least a bachelor degree or beyond in Nature, Technical, Agriculture or Health Science.


Professional Worker:

• Job Function as Professionals (Head Group No.2)


Support Worker ：

• Job Function as Technicians and associate professionals (head group NO.3)



R&D workers

Support WorkersProfessional workers

Stayers

Joiners

from patenting firms

Joiners

from non patenting firms

Graduate

Other

joiners

Leavers to

patenting firms

Leavers to

non patenting firms

Intra-region Inter-region


R&D workers


Stayers

Joiners


Joiners


Graduate

Other

joiners

Leavers to

patenting firms

Leavers to

non patenting firms



R&D workers


Stayers

Joiners


Joiners


Graduate

Other

joiners

Leavers to

patenting firms

Leavers to

non patenting firms



R&D workers


Stayers

Joiners


Joiners


Graduate

Other

joiners

Leavers to

patenting firms

Leavers to

non patenting firms


Previous Research

• Almeida and Kogut (1999) : In Silicon Valley, engineers who move inter-firm are the major patent holder.

• Agrawal and Cockburn et al (2006) : Social relationship stimulate the knowledge flow.

• Oettl and Agrawal (2008) : The former firm lost the human capital but receive the knowledge flow from worker’s new firms.

• Kaiser and Kongsted et al (2011) : Between Danish firms, there exist positive relationship between labor mobility and the firm’s innovative activity. This relationship is stronger if workers join from innovative firms.

Hypotheses (Research Question)

• Hypothesis 1: We expect inter firm labor movement of R&D workers increase the knowledge flow and represented as an increase of the number of patent application.

• Hypothesis 2: We expect the effect the the labor mobility of R&D workers who comes or goes to a firm had patent application before, is stronger.

• Hypothesis 3: We expect the effect the inter-regional labor movement is stronger, due to the knowledge similarity in same region.

• Estimator: Negative Binomial Regression (Count data)

Methodology

2

exp ln ln lnR

r rr

P A K L s

Sub-index St denotes stayers, J,P joiners from patenting firms, J,NP joiners from non-patenting firms, G joiners from tertiary education, Su support workers, L,P leavers to patenting firms and L,NP leavers to non-patenting firms, Oj other joiner without former firm’s information, Else the rest labor.

, , , ,

, , , ,

ln ln lnexp

St St J P J P J NP J NP

G G Su Su Oj Oj L P L P L NP L NP

A K L s s sP

s s s s s

P AK QL QL denotes quality-adjusted labor input, K refers to the physical capital stock.

Normalizing marginal productivity for Stayers to one.

Pre-sample estimation (1987-2000)

,1

T

i t tt

i

P PPs

T

Control Firm-Specific

Heterogeneity in Innovative Capacity

Pre-sample Dummy

Pre-sample Estimator

Equal to 1 if the firm had ever innovated during the pre-sample period.

Controls

Firm level Controls Firm Size(Employee/ R&D worker)Capital Stock

Pre-Sample Controls Pre-sample DummyPre-sample Estimator

Regional Controls Inter-Region Labor Mobility InInter-Region Labor Mobility OutIntra-Region Labor MobilityRegional Teri RateDensityLn(Access Measurement)

Industry Dummies (12 Industries)

Year Dummies (8 Year)

Regional Dummies (72 FA regions)

Data

Patent Application Data

Firm Level Data

Individual Level Data

From 1987, the data include 24,649 observations, 8573 unique firms and 154,642 patent application.

Contains 1,137,028 firms and 1,214,900 establishments.

• Exclude firms from public sector• Exclude firms founded during estimation period• Exclude firms without R&D workers• Covers 2001 to 2008

Descriptive StatisticsAll Observations Observation with pre-

sample patentObservations without pre-sample patent

Variables Means Std. Dev Means Std. Dev Means Std. Dev

Number of Patent Applications 0.4 12.5 3.7 40.88 0.01 0.2

Firm Size and Capital Stock

Employ 79.8 449.93 326.4 1214.83 54.3 255.83

R&D Relevant worker 7.2 76.34 33.1 230.49 4.6 30.32

Tertiary education worker 13.1 105.50 52.9 308.56 9 48.57

Capital Stock (in Mio, SEK) 60.5 744 267.7 1640 39.3 574

Firms had patent application during pre-sample period.

Firms had no patent application during pre-sample period.

All Observations Observation with pre-sample patent

Observations without pre-sample patent


Number of Patent Applications 0.4 12.5 3.7 40.88 0.01 0.2

Firm Size and Capital Stock

Employ 79.8 449.93 326.4 1214.83 54.3 255.83

R&D Relevant worker 7.2 76.34 33.1 230.49 4.6 30.32

Tertiary education worker 13.1 105.50 52.9 308.56 9 48.57

Capital Stock (in Mio, SEK) 60.5 744 267.7 1640 39.3 574

Descriptive StatisticsFirms had patent application during pre-sample period.

Firms had no patent application during pre-sample period.




R&D Mobility (share of employee)Joiners from patenting firms 0.002 0.02 0.005 0.02 0.002 0.02

Intra-Regional Joiners from patenting firms

0.001 0.01 0.003 0.02 0.001 0.01

Inter-Regional Joiners from patenting firms

0.0008 0.01 0.002 0.01 0.0007 0.01

Joiners from non-patenting firms 0.01 0.07 0.006 0.03 0.01 0.07

Intra-Regional Joiners from non-patenting firms

0.008 0.06 0.004 0.02 0.009 0.06

Inter-Regional Joiners from non-patenting firms

0.003 0.02 0.002 0.02 0.003 0.03

Descriptive Statistics




R&D Mobility (share of employee)Joiners from patenting firms 0.002 0.02 0.005 0.02 0.002 0.02


0.001 0.01 0.003 0.02 0.001 0.01


0.0008 0.01 0.002 0.01 0.0007 0.01

Joiners from non-patenting firms 0.01 0.07 0.006 0.03 0.01 0.07


0.008 0.06 0.004 0.02 0.009 0.06


0.003 0.02 0.002 0.02 0.003 0.03





R&D Mobility (share of employee)Leavers to patenting firms 0.002 0.03 0.004 0.05 0.001 0.02

Intra-Regional leavers to patenting firms

0.001 0.02 0.003 0.05 0.0008 0.02

Inter-Regional leavers to patenting firms

0.0006 0.01 0.001 0.01 0.0006 0.01

Leavers to non-patenting firms 0.007 0.06 0.006 0.04 0.007 0.06

Intra-Regional leavers to non-patenting firms

0.005 0.05 0.003 0.03 0.005 0.05

Inter-Regional leavers to non-patenting firms

0.002 0.02 0.002 0.02 0.002 0.03





R&D Mobility (share of employee)Leavers to patenting firms 0.002 0.03 0.004 0.05 0.001 0.02


0.001 0.02 0.003 0.05 0.0008 0.02


0.0006 0.01 0.001 0.01 0.0006 0.01

Leavers to non-patenting firms 0.007 0.06 0.006 0.04 0.007 0.06


0.005 0.05 0.003 0.03 0.005 0.05


0.002 0.02 0.002 0.02 0.002 0.03





R&D Mobility (share of employee)Graduates 0.002 0.02 0.002 0.02 0.002 0.02

Other joiners 0.005 0.04 0.003 0.02 0.005 0.04

Stayers 0.27 0.34 0.09 0.17 0.3 0.35

Support workers 0.08 0.19 0.04 0.09 0.08 0.20High

Turnover


Results-JoinerShare of Total R&D worker Share of Total Employment worker

Patent Application Coefficient Coefficient Coefficient

Coefficient Coefficient Coefficient

Patent dummy t-1 2.280*** 2.275*** 2.272*** 2.318*** 2.311*** 2.312***

R&D worker share (Base on Stayer)Joiners 0.517*** 1.447***

Joiners from patenting firms 0.773*** 3.083***


1.036*** 3.122***


0.308 3.143***

Joiners from non-patenting firms 0.284* 0.630


0.171 0.172


0.457* 2.131***

Different Types of R&D workers

The number of total R&D workers

Different Types of R&D workers

The number of total Employee


Patent Application Coefficient Coefficient Coefficient Coefficient Coefficient CoefficientPatent dummy t-1 2.280*** 2.275*** 2.272*** 2.318*** 2.311*** 2.312***




1.036*** 3.122***


0.308 3.143***



0.171 0.172


0.457* 2.131***






1.036*** 3.122***


0.308 3.143***



0.171 0.172


0.457* 2.131***






1.036*** 3.122***


1.308 3.143***



0.171 0.172


0.457* 2.131***

Results-Leaver and OthersShare of Total R&D worker Share of Total Employment worker

Patent Application Coefficient Coefficient Coefficient Coefficient Coefficient CoefficientGraduates 0.150 0.160 0.175 2.002*** 2.035*** 2.001***

Other Joiners 0.428* 0.421* 0.422* 1.407*** 1.337*** 1.356***

Support Workers 0.0594 0.0574 0.0562 0.395* 0.386* 0.392*

Leavers -0.330* -1.259

Leavers to patenting firms -0.261 -0.583


-0.263 -2.561


-0.317 1.900*

Leavers to non-patenting firms -0.379* -1.753*


-0.631* -2.671*


-0.0201 -0.324

Non R&D worker -0.736* -0.726* -0.730*



Other Joiners 0.428* 0.421* 0.422* 1.407*** 1.337*** 1.356***

Support Workers 0.0594 0.0574 0.0562 0.395* 0.386* 0.392*

Leavers -0.330* -1.259



-0.263 -2.561


-0.317 1.900*



-0.631* -2.671*


-0.0201 -0.324

Non R&D worker -0.736* -0.726* -0.730*



Other Joiners 0.428* 0.421* 0.422* 1.407*** 1.337*** 1.356***

Support Workers 0.0594 0.0574 0.0562 0.395* 0.386* 0.392*

Leavers -0.330* -1.259



-0.263 -2.561


-0.317 1.900*



-0.631* -2.671*


-0.0201 -0.324

Non R&D worker -0.736* -0.726* -0.730*



Other Joiners 0.428* 0.421* 0.422* 1.407*** 1.337*** 1.356***

Support Workers 0.0594 0.0574 0.0562 0.395* 0.386* 0.392*

Leavers -0.330* -1.259



-0.263 -2.561


-0.317 1.900*



-0.631* -2.671*


-0.0201 -0.324

Non R&D worker -0.736* -0.726* -0.730*



Other Joiners 0.428* 0.421* 0.422* 1.407*** 1.337*** 1.356***

Support Workers 0.0594 0.0574 0.0562 0.395* 0.386* 0.392*

Leavers -0.330* -1.259



-0.263 -2.561


-0.317 1.900*



-0.631* -2.671*


-0.0201 -0.324

Non R&D worker -0.736* -0.726* -0.730*



Other Joiners 0.428* 0.421* 0.422* 1.407*** 1.337*** 1.356***

Support Workers 0.0594 0.0574 0.0562 0.395* 0.386* 0.392*

Leavers -0.330* -1.259



-0.263 -2.561


-0.317 1.900*



-0.631* -2.671*


-0.0201 -0.324

Non R&D worker -0.736* -0.726* -0.730*

Results-Firm Controls and Pre-Sample Controls Share of Total R&D worker Share of Total Employment worker

Patent Application Coefficient Coefficient Coefficient Coefficient Coefficient CoefficientFirm Size and Capital

Stock

Ln(Labor Force) 0.258*** 0.257*** 0.259*** 0.246*** 0.246*** 0.246***

(6.87) (6.83) (6.87) (5.84) (5.86) (5.84)

Ln(Capital Stock) 0.0571*** 0.0573*** 0.0574*** 0.0542*** 0.0538*** 0.0546***

(5.70) (5.66) (5.61) (5.11) (5.04) (4.98)

Pre-sample variables

Ln(FE) 0.381*** 0.381*** 0.383*** 0.399*** 0.399*** 0.401***

(8.14) (7.98) (7.90) (8.05) (7.95) (7.78)

FE dummy 2.949*** 2.942*** 2.943*** 3.034*** 3.018*** 3.020***

(21.58) (21.42) (21.28) (22.18) (21.91) (21.63)

• Labor Mobility increase the knowledge flow.

• Joiners from patenting firms have stronger effect compare to joiners from non-patenting firms to innovation activity.

• Inter-regional joiner from patenting firm have a stronger effect compare to intra-regional joiner to innovation activity.

• Inter-regional joiner from non-patenting firms have a positive effect to innovation activity..

• Gradates, Other joiners and support workers have positive effects to innovation activity.

Conclusion

• Inter-regional leaver to patenting firms have a positivity effect but less significant.

• Leavers to non-patenting firms have a negative effect to innovation activity.

• Robustness Test shows the result are stable.

Conclusion

Thank you very much.

Documents

Labor Mobility Foster Innovation? Evidence from Sweden Pontus Braunerhjelm, Ding Ding and Per Thulin Royal Institute of Technology Department of Industrial