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Title: Innovation Investment and the Firm Boundary: The Effect of Corporate R&D on Labor Reallocation

Citation Type: Miscellaneous

Publication Year: 2019

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Abstract: This paper studies how corporate research and development investment (R&D) affects labor reallocation around the firm boundary, using employer-employee matched U.S. Census panel data. We document that R&D increases employee departures to entrepreneurship, but not to other incumbent firms or exit from employment. The ideas or skills that spill into startups seem to benefit from focused, high-powered incentives. For example, R&D-induced startups are much more likely to receive venture capital. The effect also seems to reflect ideas or skills that are poor complements to the firm's assets.

Url: https://www.mccombs.utexas.edu/~/media/Files/MSB/Centers/HMTF/TFF/2019 Papers/Howell2.pdf

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Authors: Babina, Tania; Howell, Sabrina T

Publisher: Columbia GSB

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Other

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