The Impact of Interfirm Labor Mobility on Innovation: Evidence from Job Search Portal Data

Abstract

Mobility of workers is one of the most important channels of knowledge spillovers between firms. In this study, we look at the relationships between interfirm labor mobility and technological innovation at firm level. For the analysis of labor mobility, we use a novel Estonian database from an online job search portal that includes detailed data on occupations and education. The employee level data is matched with the Community Innovation Survey data on business enterprises. We estimate various specifications of the knowledge production functions augmented using mobility indicators. In particular, the results indicate that product innovations and total factor productivity are associated with subsequent higher worker flows from other, especially innovative, firms. Among flows involving people in different occupations, the flows of managers and professionals and technicians are more important.