Knowledge Diffusion through Employee Mobility

Posted: 14 Aug 2008

See all articles by April Franco

April Franco

University of Toronto - Rotman School of Management; University of Toronto at Scarborough - Division of Management

Darren Filson

Claremont McKenna College - Robert Day School of Economics and Finance

Date Written: July 1, 2000

Abstract

In high-tech industries, one important method of diffusion is through employee mobility: many of the entering firms are started by employees from incumbent firms using some of their former employers' technological know-how. This paper explores the effect of incorporating this mechanism in a general industry framework by allowing employees to imitate their employers' know-how. The equilibrium is Pareto optimal since the employees "pay" for the possibility of learning their employers' know-how. The model's implications are consistent with data from the rigid disk drive industry. These implications concern the effects of know-how on firm formation and survival.

Keywords: Innovation, Diffusion, Research and Development, Industry Dynamics, Spinout, Techonological Change, Rigid Disk Drive

JEL Classification: L11, L63, J24, O31

Suggested Citation

Franco, April and Filson, Darren, Knowledge Diffusion through Employee Mobility (July 1, 2000). Available at SSRN: https://ssrn.com/abstract=1223445

April Franco (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

University of Toronto at Scarborough - Division of Management ( email )

1265 Military Trial
Scarborough, Ontario M1C 1A4
Canada

Darren Filson

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth Street
Claremont, CA 91711
United States

HOME PAGE: http://www.cmc.edu/academic/faculty/profile/darren-filson

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