The Influence Of Foreign Multinationals Employees On Israeli Startups

In recent years,the R&D activity of foreign multinationals in the Israeli high-tech industry has developed rapidly.Similarly,Israel’s high-tech industry is developing rapidly,especially among startups.The presence of foreign multinationals will cause knowledge spillovers and brain drain.Therefore,this thesis analyzes the operations of multinational companies in Israel and their impact on startups,specifically the impact of the transition of employees.This thesis includes five chapters.Chapter 2 analyzes the literature review on multinationals.Chapter 3 analyzes the data on foreign multinational corporations and the data of Israeli startups.Findings show that foreign multinationals have invested a lot in Israeli startups.In addition,foreign multinationals have many research and development centers in Israel.Chapter 4 analyzes data on employee mobility and finds that the salary levels and research and development intensity of foreign multinational companies are higher than those of local companies in the same industry.In terms of employee mobility,many high-paid employees have moved from foreign multinational companies to startups.In addition,the movement of employees from foreign multinational companies to startups has led to decrease in their salaries.Chapter 5 analyzes the case of IBM.The case study included interviews with five employees who left IBM to establish a startup.Studies have found that employees who leave foreign multinationals bring unique knowledge and experience to help startups succeed.The unique contribution of these employees to local entrepreneurial p e r f o r ma n c e illustrates the existence of knowledge spillovers,which is one of the channels for foreign multinational companies to influence local high-tech companies.In addition,foreign multinational corporations carry out many activities to help startups and promote cooperation.Israel’s R&D center is recognized by the Technology Development Center.Instead of relocating their employees,foreign multinationals are expanding their R & D centers in Israel.