Directions and Paths of Knowledge Flows through Labour Mobility: A Social Capital Perspective

This paper investigates how knowledge flows across companies through labour mobility, focusing on differences in regional affiliations, industry affiliations and foreign affiliations. The theoretical framework relies on a social capital perspective, which postulates that firms devote consistent strategic effort to shaping their social capital through labour inflows and outflows. The regression analyses, based on 1331 dyads involving 3895 employee movements across 397 companies in the Bangalore information technology cluster in India, indicate that companies tend to hire locally and from rivals. Moreover, multinational corporations favour labour outflows to cluster firms, which enhance their local social capital and fuel knowledge transfers within clusters.