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            <title xml:lang="en">The Role of Workers in Knowledge Diffusion Across Firms</title>
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            <funder>A. Akerman gratefully acknowledges support from the Research Council of Norway (grant no. 326000). K. Holzheu thanks the Banque de France for financial support.</funder>
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                <term xml:lang="en">Productivity</term>
                <term xml:lang="en">Worker Mobility</term>
                <term xml:lang="en">Innovation</term>
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              <p>We study how worker mobility contributes to aggregate productivity growth by diffusing knowledge across firms. We develop a multi-worker-firm framework with random search and on-the-job mobility in which firm productivity improves through in-house innovation and through hiring workers from other firms. Using Swedish matched employer–employee and product-level data, together with event-study evidence based on shift-share international trade shocks, we show that the extent and direction of worker mobility affect firm productivity. We estimate that mobility-driven knowledge diffusion accounts for over 44% of growth in average firm productivity. Our results suggest that lower worker mobility, and more mobility from less productive firms, can depress growth in average firm productivity.</p>
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