Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2017-12-08
Revision-Date: 2020-03-03
Number: 17-115/VII
Author-Name: Ajay Bhaskarbhatla
Author-Email: bhaskarbhatla@ese.eur.nl
Author-Workplace-Name: Erasmus School of Economics, ERIM
Author-Name: Luis Cabral 
Author-Workplace-Name: New York University
Author-Name: Deepak Hegde
Author-Email: dhegde@stern.nyu.edu
Author-Workplace-Name: New York University
Author-Name: Thomas (T.L.P.R.) Peeters
Author-Email: peeters@ese.eur.nl
Author-Workplace-Name: Erasmus School of Economics, ERIM; Tinbergen Institute, The Netherlands
Title: Human Capital, Firm Capabilities, and Innovation
Abstract: In this study, we decompose the contributions of employeesÕ human capital and firmsÕ capabilities for innovation using a 37-year panel of U.S. patenting activity. We estimate that inventorsÕ human capital is 5-10 times more important than firm capabilities for explaining the variance in inventor output. We then examine matching between inventors and firms and find highly productive inventors are attracted to firms that (i) have weak firm-specific invention capabilities, and (ii) employ other talented inventors. A theoretical model that incorporates worker preferences for inventive output rationalizes our empirical findings of negative assortative matching between inventors and firms, and positive assortative matching among inventors.
Classification-JEL: O30, O31, O32, J24
Keywords: Human Capital, Capabilities, Innovation, Matching, Competitive Advantage
File-Url: https://papers.tinbergen.nl/17115.pdf
File-Format: application/pdf
File-Size: 1036969 bytes
Handle: RePEc:tin:wpaper:20170115