The Influence of Technological Interdependence on Employee Entrepreneurship and Mobility: Evidence from the Semiconductor Industry

Abstract

The intra-industry activities of employees post-exit from incumbent firms have been identified as an important determinant of industry dynamics and structure. The post-exit founding of startups employee entrepreneurship is widely heralded as an important driver of innovation, firm creation and growth. Similarly, post-exit employee mobility to rival firms has been recognized as a crucial channel for knowledge spillovers. Far less is known, however, about how technology influences this flow of talent. This study investigates one attribute of technology - technological interdependence. Drawing on a unique database of intra-industry inventor entrepreneurship and mobility events as well as patent citations in the U.S. semiconductor industry, I find that the propensity to engage in employee entrepreneurship increases, but to join a rival firm, decreases with the technological interdependence of inventor's prior patents. This study sheds new light on how technology shapes patterns of employee entrepreneurship and mobility with implications for knowledge flows and competitive dynamics.