Firm innovation: The influence of R&D cooperation and the geography of human capital inputs

Abstract

This paper investigates the role played by the geography of labor inputs in the promotion of innovation. Knowledge can be transferred between firms by inter-firm interactions and inter-firm cooperation. In addition, knowledge can also be transferred between firms by human capital mobility. In order to examine these issues we employ a unique innovation dataset from Finland. This dataset provides information about a firm's innovation performance along with information regarding the origins of a firm's recent labor acquisitions. The origins of the labor are defined according to both the industry and the region. Analyzing these data allows us to identify the different roles which the geography of knowledge exchanges and the geography of labor markets play in the innovation process.