Is inter-firm labor mobility a channel of knowledge spillovers? Evidence form a linked employer-employee panel?

An employer–employee panel is used to study whether the movement of workers across firms is a channel of unintended diffusion of r&d-generated knowledge. Somewhat surprisingly, hiring workers from others’ r&d labs to one's own does not seem to be a significant spillover channel. Hiring workers previously in r&d to one's non-r&d activities, however, boosts both productivity and profitability. This is interpreted as evidence that these workers transmit knowledge that can be readily copied and implemented without much additional r&d effort.