Make Hay While the Sun Shines or be More Loyal Than the King? The Impact of External Labor Markets on the Technological Search Process within Firms.

Abstract

Past research on technological search has extensively studied the consequences of searching in different loci and in different manners. Less attention in given to the antecedents of the search process: why do researchers search in the way that they do? This dissertation attends to the career concerns of the researchers and investigates how the state of external labor market influences the way in which researchers conduct their technological search, i.e. where they look for technological ideas for innovations: inside the firm or outside; in familiar or new technological domains. I argue that when external job opportunities for researchers decline, they pay greater attention to knowledge flows inside their firms and build on ideas from inside the firm. Further, they expand their search into new technological domains to broaden their skills. On the other hand, when external opportunities increase, contributing to firms' existing research trajectories becomes less important and returns to specialization increase. I also examine the moderating influence of two individual specific factors - the specialization and the relative position of researchers, and two firm specific factors - the division of labor in the firm and the technological prominence of the firm. Using a comprehensive dataset of patents filed by the public electronic firms from 1992 to 2002, I construct an individual inventor specific measure of external job opportunities based on the R&D investments of all external firms in the technological domains that the inventor has worked on during the previous three years and relate it to her technological search. The tests show that greater growth in job opportunities is associated with reduced technological breadth of search. This effect is reduced by a researcher's relative position in the firm and increased when the firm's researchers are more specialized. Contrary to expectation this effect is increased with a firm's technological prominence. The tests provide mixed support for the prediction that greater growth in opportunities is associated with increased organizational breadth of search. I find strong support for the predictions that this effect is increased when the firm's researchers are more specialized and with the technological prominence of the firm.