By emphasizing the potential benefits in organizational learning, management research on strategic human capital generally supports the importance of learning-by-hiring highly capable knowledge workers with relevant knowledge for the focal firms. However, firm-level rivalry may also play a role in such human capital acquisition and affect the subsequent performance of individuals depending on their previous affiliations. We argue that hiring individuals from 'rival' firms would be less effective due to the firm-level rivalry. We also examine how such negative relationships can be avoided. By utilizing individual-level patent data on inventors and their performance within major U.S. technology firms, our empirical analyses suggest that mobile individuals from rival firms, compared to externally hired individuals from non-rivalry firms, have more significant productivity loss upon mobility. Additional analysis further suggests why geographic proximity and successful integration may moderate this negative performance implication. The results of this study suggest a critical boundary condition to research on learning-by-hiring.
