Entrepreneurial Spillovers from Corporate R&D

76 Pages Posted: 17 Dec 2018 Last revised: 18 Apr 2021

See all articles by Tania Babina

Tania Babina

Columbia Business School - Finance and Economics

Sabrina T Howell

New York University (NYU) - Leonard N. Stern School of Business; National Bureau of Economic Research (NBER)

Date Written: December 2018

Abstract

This paper studies how corporate research and development (R&D) investment affects labor mobility. We use employer-employee matched data in ordinary least squares and instrumental variables analyses to assess four hypotheses. R&D has no effect on worker retention, exit from employment, or mobility to incumbent firms. Instead, it increases employee departures to entrepreneurship, leading employees to join the founding teams of startups that are venture capital-backed, high tech, high wage, and in different sectors than the parent firm. These high-growth, high-risk startups emerging from R&D benefit from a focused, standalone incentive structure and have poor complementarities to the parent firm’s assets.

Suggested Citation

Babina, Tania and Howell, Sabrina T, Entrepreneurial Spillovers from Corporate R&D (December 2018). NBER Working Paper No. w25360, Available at SSRN: https://ssrn.com/abstract=3302479

Tania Babina (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
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Sabrina T Howell

New York University (NYU) - Leonard N. Stern School of Business ( email )

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New York, NY NY 10012
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212-998-0913 (Phone)

HOME PAGE: http://www.sabrina-howell.com

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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