Reputations for toughness in patent enforcement: Implications for knowledge spillovers via inventor mobility

Rajshree Agarwal, Martin Ganco, Rosemarie H. Ziedonis

Research output: Contribution to journalArticlepeer-review

154 Scopus citations

Abstract

'Job hopping' by engineers and scientists is widely heralded as an important channel for knowledge spillovers within industries. Far less is known, however, about the actions firms take to reduce the outward flow of knowledge through markets for skilled labor. This study investigates the efficacy of a lever that has received little research attention: corporate reputations for toughness in patent enforcement. Drawing on unique data on enforcement activity, intraindustry inventor mobility, and patent citations in the U.S. semiconductor industry, we find that a firm's litigiousness significantly reduces spillovers otherwise anticipated from departures of employee inventors, particularly when the hiring organizations are entrepreneurial ventures. Surprisingly, the deterrent effects of patent enforcement are similar in magnitude for firms located in California, a state characterized by open norms for knowledge trading, and firms headquartered in other U.S. states. The study sheds new light on the strategic actions firms use to prevent rivals from capturing value from their investments in human capital and research and development.

Original languageEnglish (US)
Pages (from-to)1349-1374
Number of pages26
JournalStrategic Management Journal
Volume30
Issue number13
DOIs
StatePublished - Dec 2009

Keywords

  • Corporate strategy
  • Employee mobility
  • Intangible assets
  • Knowledge spillovers
  • Patents
  • Reputation

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