It has long been recognized that worker wages and possibly productivity are higher in large firms. Moreover, at least since Schumpeter (1942) economists have been interested in the relative efficiency of large firms in the research and development enterprise. This paper uses longitudinal...

We develop and test a model of the patenting and R&D decisions of an innovating firm whose scientist-employees sometime quit to join or start a rival. In our model, the innovating firm patents to protect itself from its employees. We show theoretically that the risk of a scientist's departure...