Week 13_Ganco (2013)_Jung Kwan Kim

Ganco (2013) examines the relationship between knowledge complexity and employee mobility/entrepreneurship. The author argues that the knowledge gained in a prior firm significantly affects the choice of an inventor on the next move between staying, moving, and starting-up. More specifically, the complexity of knowledge works as a contingent factor to determine the modes of the next move in terms of mobility vs. entrepreneurship and individual vs. team mobility.

The empirical findings are just as intuitively expected. The inventors with highly complex knowledge are less likely to move to competing firms possibly because complexity inhibits knowledge diffusion. Furthermore, the inventors with highly complex knowledge in prior firms are more likely to start their ventures than to move to rivals. This is probably because transferring complex knowledge across the boundary of a firm is challenging while starting from a clean sheet can be more effective and efficient to appropriate the value of knowledge. In addition, highly complex knowledge tends to strengthen the tendency of co-inventors to move or start up as a team because a partial knowledge of an individual may not be enough to leverage the knowledge in a new setting.

All in all, this study carves out an interesting contingent factor in employee mobility and entrepreneurship, which can be generalizable in many knowledge-intensive industries.