Labor mobility from R&D-intensive multinational companies: implications for knowledge and technology transfer
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Labor mobility from R&D‑intensive multinational companies: implications for knowledge and technology transfer Jacob Rubæk Holm1 · Bram Timmermans1,2 · Christian Richter Østergaard1 · Alex Coad3,4 · Nicola Grassano5 · Antonio Vezzani6
© Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Private sector R&D is largely concentrated in a few multinational companies (MNCs). The mobility of labor between these MNCs and the rest of the economy is therefore an important mechanism for the diffusion of knowledge and technology, but these flows are not without friction. This paper analyses in great detail the flow of labor between firms with specific emphasis on flows to and from R&D intensive MNCs. Using linked employeremployee data for Denmark, we match employees moving from R&D intensive MNCs to other employees switching jobs. We find that employees are more inclined to move between R&D intensive MNCs and their subsidiaries rather than between these firms and other firms in the economy. This is particularly true for high skill employees. Our results suggest that other domestic firms are to a larger extent kept out of the ‘knowledge spillover’ loop, which provides them with fewer opportunities to learn from the R&D intensive MNCs. In other words, R&D intensive MNCs and their subsidiaries form a kind of sublabor market within the national labor market; employees exhibit higher mobility within this group of firms than between this group and the rest of the labor market. Keywords Labor mobility · Multinational companies · Knowledge flows · R&D JEL Classification J21 · F23 · O32
1 Introduction Private sector R&D is concentrated in a few multinational companies (MNCs). In 2015, the top 2500 R&D firms worldwide invested more than 90% of the global business enterprise expenditure in R&D (Guevara et al. 2015). Top R&D investors thus play an important role in the creation of knowledge and technology in the economy. The integration of these firms in the broader economy is therefore important in order to create knowledge spillovers to the rest of the economy, through various mechanisms such as flows of employees from one firm to another. * Alex Coad [email protected] Extended author information available on the last page of the article
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Previous literature has investigated the role of labor flows as a mechanism for knowledge transfer from MNCs to non-MNC firms in the same country. For example, using data on Norwegian manufacturing firms for the period 1990–2000, Balsvik (2011) investigates the productivity spillovers that arise when employees leave MNCs to work at non-MNCs. Relatedly, Poole (2013) presents evidence of positive spillovers from MNCs to non-MNCs, which is associated with worker mobility, in the context of Brazil. Falck (2016) contains an exploratory analysis of labor mobility patterns in Sweden, framed in terms of evidence of opportunities for spillovers from MNCs to domestic non-MNCs. Related, Stoyanov and Zubanov (2014) analyze Danish employ
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