Workers’ Mobility, Technical Transfer, and Firms’ Performance in Peru

Knowledge is transferred between firms explicitly or tacitly. While non-embedded knowledge can be transferred explicitly through patent citations, embedded knowledge is essentially transferred tacitly through knowledgeable workers’ movements. Given the higher prevalence of the latter, improved matching and allocation efficiency gains due to workers’ displacement can exert relevant impact on a firm’s performance and on economic growth. This paper explores knowledge spill overs across firms occurring due to displacement of workers who transit from better to less performing firms. Allegedly, workers who move from more successful firms carry with them some knowledge of the technology that induces improvements of performance in the recipient firms. Different measures of firms’ performance are studied (proxies for firms’ productivity such as average quality of labor workforce and estimated TFP per firm). Discrimination according to sector of sending and recipient firms (R&D intensive or not) and type of moving worker (scientific or not) is taken into consideration to differentiate results. Matched employer-employee administrative records of the Peruvian formal sector allow to control for several time varying observables and time invariant non-observables on both ends (firms and workers). Preliminary findings of this paper suggest that spillovers exist, that is, recipient firms improve performance after receiving workers from better performing firms. This happens with more intensity for workers transiting across firms of more than 50 workers, with higher educational levels, with occupations related to sciences, technology and engineering and in firms operating in more R&D oriented sectors.