Labour mobility and organisational proximity: routines as supporting mechanisms for variety, skill integration and productivity

The aim of this paper is to introduce an organisational dimension to the discussion of knowledge flows and relatedness. We hypothesise that not only the degree of technological relatedness influence the extent of skill integration in a firm but also that familiarity with firm routines (intra-organisational proximity) should smoothen absorption. Longitudinal micro-data are used in pooled ordinary least square- and fixed effect models to estimate the impact on plant productivity growth of 18,051 labour flows within, and to, four large Swedish firms between 2003 and 2006. Our findings suggest that intra-regional related flows are economically beneficial. Their link to localised capabilities and community creates a weaker but more productive link between individuals than do organisational proximity, which generate too much similarity to allow for cognitively related inflows to impact productivity growth. Also, we find a positive relationship between unrelated flows and plant performance.