Abstract:
Labor turnover is a commonly cited mechanism for the transmission of knowledge between firms. This paper estimates the effect of the diffusion of knowledge between firms on their long-term performance. To identify the diffusion of knowledge we use the increase in knowledge due to the participation of some firms into an innovation program. This generation of knowledge is exogenous for non-participant firms and therefore provides us with an exogenous knowledge shock to identify the diffusion of knowledge through labor mobility. Using an employer-employee matched panel dataset with the whole population of firms and workers in Argentina for the period 1998-2013we track the mobility of skilled workers from participating firms to other firms—receiving firms. We measure the spillover as the improvement in the performance of receiving firms due to the fact they hired skilled workers with specific knowledge. To estimate this effect we use a lagged dependent variable model that allows us to compare firms with similar evolution before they hire skilled workers from the participant firms. We control for important observables as the fact of hiring skilled workers, different from those coming from firms that participated in the program, and time varying unobservable factors at the industry and region level. We find that receiving firms increased employment, wages, the exporting probability.
