Tapping into Industry and Academia: Inbound Mobility, R&D Collaboration and Substitution Effects

This paper studies how different boundary-spanning mechanisms concurrently impact firm innovation. We specifically examine how inbound mobility and R&D collaboration interact when firms use these mechanisms to tap into two distinct knowledge domains: industry and academia. To examine the impacts of simultaneously sourcing academia and industry through hiring and collaboration we utilize a unique Danish dataset which draws on three independent data sources including employer-employee register data, R&D survey data, and patent application data from the European Patent Office. The analysis relies on 13472 firm-year observations, including 12608 hiring events and 691 collaborations, in the period 2001-2004. The results indicate that inbound mobility and collaboration substitute for one another and this result accentuates when firms use both mechanisms to source knowledge from within either the industry or academia domain. We interpret these results as evidence of knowledge redundancies, diseconomies of scope and attention-allocation problems. We contrast prior research on the benefits of involving external partners in a firm?s R&D process by underscoring negative marginal returns from simultaneously sourcing the same type of external organization with a different mechanism.