Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/177683 
Year of Publication: 
2017
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 17-115/VII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
Are differences in inventor productivity due to differences in inventors’ skills or differences in the capabilities of the firms they work for? We analyze a 37-year panel that tracks the patenting of U.S. inventors and find strong evidence for serial correlation in inventors’ productivity. We apply an econometric technique developed by Abowd, Kramarz, and Margolis (1999) to decompose the contributions of inventors’ human capital and firm capabilities for productivity. Our estimates suggest human capital is 4-5 times more important than firm capabilities for explaining the variance in inventor productivity. High human capital inventors work for firms that have (i) other high human capital inventors, (ii) superior financial performance, and (iii) weak firm-specific invention capabilities. On the margins, managers should emphasize selecting talent rather than training workers to enhance innovation performance.
Subjects: 
Human Capital
Capabilities
Innovation
Matching
Competitive Advantage
JEL: 
O30
O31
O32
J24
Document Type: 
Working Paper

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