Research


Working Papers

Inventor mobility is widely viewed as an important channel of knowledge diffusion across firms. Yet these gains may reflect destination sorting if displaced inventors simply move to firms that were already becoming more innovative. These explanations are difficult to separate because hiring responds to firms’ own demand for innovation. I exploit 237 U.S. mass layoffs between 2000 and 2016 as exogenous shocks to inventor displacement. I then study inventors who were already employed at firms that later hire these displaced inventors. My event study is centered on each incumbent inventor’s first exposure to a displaced inventor joining the same firm. Exposure increases the probability that an incumbent produces a highly novel patent by 1.5 percentage points. The effect builds gradually and persists. In contrast, citations per patent do not increase. This pattern suggests that exposure redirects inventive search rather than raising the impact of individual inventions. Three additional findings support a knowledge-spillover interpretation. First, there is no similar response following ordinary experienced hires. Second, the effect increases with exposure intensity. Third, it is substantially larger when incumbents and arriving displaced inventors work in related technologies. This stronger effect remains within the same receiving firm and year, even after absorbing firm-wide innovation and hiring shocks. Taken together, the evidence favors a knowledge-spillover interpretation over broad destination sorting and suggests that inventor mobility generates positive innovation externalities for incumbent inventors within receiving firms.


Work in Progress