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While mobility's effect on knowledge transfer to firms that hire mobile employees is well demonstrated, we choose to explore mobility's effect on knowledge transfer to firms that lose these employees. Focusing on this ‘outbound mobility’ allows us to isolate effects of social mechanisms associated with mobility. We find that semiconductor firms losing employees are more likely to subsequently cite patents of firms hiring these employees, suggesting that mobility‐driven knowledge flows are bidirectional. In addition, the outbound mobility effect is pronounced when mobility occurs between geographically distant firms, but attenuates for geographically proximate firms since other redundant knowledge channels exist within regions. Copyright © 2009 John Wiley & Sons, Ltd.