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Productivity spillovers through labor flows: productivity gap, multinational experience and industry relatedness

  • Zsolt Csáfordi
  • László Lőrincz
  • Balázs Lengyel
  • Károly Miklós Kiss
Article

Abstract

Labor flows are important channels for knowledge spillovers between firms; yet competing arguments provide different explanations for this mechanism. Firstly, productivity differences between the source and recipient firms have been found to drive these spillovers; secondly, previous evidence suggests that labor flows from multinational enterprises provide productivity gains for firms; and thirdly, industry relatedness across firms have been found important, because industry-specific skills have an impact on organizational learning and production. In this paper, we aim to disentangle the effects of productivity gap, multinational experience and industry relatedness in a common framework. Hungarian employee–employer linked panel data from 2003–2011 imply that the incoming labor from more productive firms is associated with increasing future productivity. The impact of multinational spillovers cannot be confirmed, once productivity differences between the firms are taken into account. Furthermore, we find that flows from related industries outperform the effect of flows from same and unrelated industries even if we control for the effects of productivity gap and multinational spillovers.

Keywords

Industry relatedness Firm productivity Knowledge spillovers Labor mobility Productivity gap Multinational enterprises Industry space 

JEL Classification

D22 J24 J60 M51 

Notes

Acknowledgements

The research project was financed by the Hungarian Scientific Research Fund (K112330). Data was developed and access was provided by the Databank of the Center for Economic and Regional Studies, Hungarian Academy of Sciences. The paper also uses the Hungarian Prodcom database matched to the firm-level balance sheet panel data, available at the Central Statistical Office of Hungary; calculations and conclusions drawn therefrom are intellectual products of the authors. We are thankful for the help of Zoltán Elekes for providing the product space matrices on the SITC level. Comments by Gábor Békés, Rikard Eriksson, César Hidalgo, János Köllő, Balázs Muraközy, Frank Neffke, Victor López Pérez and two anonymous reviewers are gratefully acknowledged. The authors received further suggestions at the 35th SUNBELT Conference of INSNA in Brighton 2015, the Finance and Economics Conference of LUPCON in Frankfurt 2015, the 2nd EEGinCEE workshop in Szeged 2015, the 2nd Skill-relatedness workshop in Gothenburg 2015, the 9th Conference of the Society for Hungarian Economists in Budapest 2015, the 81st International Atlantic Economic Conference in Lisbon 2016, the 32nd Annual Congress of the European Economic Association in Lisbon 2017 and during seminar sessions at the Hungarian Academy of Sciences, the MIT Media Lab and Northeastern University.

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Copyright information

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Authors and Affiliations

  1. 1.Centre for Economic and Regional Studies, Institute of EconomicsHungarian Academy of SciencesBudapestHungary
  2. 2.Erasmus University RotterdamRotterdamThe Netherlands
  3. 3.Corvinus University of BudapestBudapestHungary
  4. 4.International Business SchoolBudapestHungary
  5. 5.Massachusetts Institute of TechnologyCambridgeUSA
  6. 6.University of PannoniaVeszprémHungary

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