Relatedness through experience: On the importance of collected worker experiences for plant performance

We demonstrate that multiple cognitive dimensions exist between employees in knowledge intensive business services (KIBS) and that these dimensions interact in their influence on plant performance. Knowledge and cognitive distance are measured as formal knowledge and industry experience. Pooled OLS regressions with year, industry, and region-fixed effects are used to estimate the impact on plant performance. The results suggest that the commonly found negative impact of similarity in formal knowledge on plant performance may be reduced by high human capital ratios or high levels of similarity in experience. Moreover, the organizational structures associated with single-plant and multi-plant firms, generate different plant performance outcomes of knowledge variety.