How Does R&D Worker Recruitment Affect Firm Exploration? A Longitudinal Study of the Role of Cognitive Distance

R&D worker hiring has been characterized as an important boundary-spanning mechanism through which firms search unexplored knowledge areas. In this paper we examine the role of individuals’ educational background and firm experience in the association between hiring and firm-level exploratory search. Combining Danish employer-employee matched panel data with patent data from the European Patent Office for the period 1999-2004 we find that the cognitive distance between R&D recruits and incumbent R&D workers positively impacts the hiring firm’s subsequent degree of exploratory search. Yet, we hypothesize and find that educational diversity among the incumbent R&D workers negatively moderates the relationship between cognitive distance and exploratory search. Our results also reveal that the positive relationship between cognitive distance and subsequent degree of firm exploration attenuates as firms mature. This study advances our understanding of how mobility of scientists and engineers impacts the ability of firms to explore new knowledge areas, and the conditions under which this occurs.