The role of human capital: Evidence from corporate innovation

Abstract

This paper examines the distinct roles played by inventors and firms in contributing to corporate innovation. Inventors are about 6-8 times as important as firms in contributing to innovation performance measured by patent and citation counts, but their importance is about the same in innovation strategies captured by patent exploratory and exploitative scores. Using staggered adoption of the inevitable disclosure doctrine as plausibly exogenous shocks to labor mobility, we find the contribution of inventors to innovation performance increases and the contribution of inventors to innovation strategy decreases when labor mobility is restricted. In addition, inventors contribute more when they are better connected, and in industries in which innovation is more difficult to achieve. Additional tests suggest that our main findings are unlikely driven by endogenous matching between firms and inventors.

Keywords: Organizational capital, Human capital, Firms, Inventors, Innovation persistence

JEL Classification: G30, G32, O32