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- Title
Spin-outs: knowledge diffusion through employee mobility.
- Authors
Franco, April Mitchell; Filson, Darren
- Abstract
In many industries, one important method of diffusion is through employee mobility: many of the entering firms are started by employees from incumbent firms using some of their former employer's technological know-how. This article explores the effect of incorporating this mechanism in a general industry framework by allowing employees to imitate their employers' know-how. The equilibrium is Pareto optimal because the employees 'pay' for the possibility of learning their employers' know-how. The model's implications are consistent with data from the rigid disk drive industry. These implications concern the effects of know-how on firm formation and survival.
- Publication
RAND Journal of Economics (Wiley-Blackwell), 2006, Vol 37, Issue 4, p841
- ISSN
0741-6261
- Publication type
Article
- DOI
10.1111/j.1756-2171.2006.tb00060.x