2018/01/01 by Tania Babina, Sabrina T. Howell, Sabrina T Howell
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Finance and Governance #Entrepreneurship Studies and Influences #Firm Innovation and Growth #Innovation Policy and R&D
paper · doi:10.1086/723501
openalex publication_date 2018/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/14
This paper offers the first study of how changes in corporate R&D investment affect labor mobility. We show that increases in R&D spur employee departures to join start-ups’ founding teams. This appears to reflect employees taking the ideas, skills, or technologies created through the R&D process but not especially valuable to the R&D-investing firm to start-ups. The employee-founded start-ups tend to be outside the R&D-investing employer’s industry, suggesting that the underlying ideas would impose diversification costs on the R&D-investing firm. The start-ups are more likely to be VC backed, high tech, and high wage, pointing to substantial spillover benefits.