Covenants not to Compete, Labor Mobility, and Industry Dynamics
نویسندگان
چکیده
Conventional wisdom among legal scholars is that contractual restrictions on employee mobility a¤ect turnover and led to the overtaking of MassachusettsRoute 128 by Silicon Valley. We study a model of employee mobility in the spirit of Pakes and Nitzan (1984) to see when this can be the case. We show that, in fact, with certain frictions taken into account, a model of employee mobility can not only replicate the overtaking by Silicon Valley, but it can also help to explain Route 128s early dominance. Further, the model explains the relative success of rms that start as, or generate, spin-outs.
منابع مشابه
Spinoffs and the Mobility of U.S. Merchant Semiconductor Inventors
Data on assignees of patenters are used to analyze the mobility of semiconductor inventors. A model of the entry and staffing of spinoffs of incumbent producers is developed to explain the higher mobility of semiconductor inventors in Silicon Valley. Exploiting data on the origins of semiconductor producers with larger sales, we argue that the greater mobility of semiconductor inventors in Sili...
متن کاملEnforcing Covenants Not to Compete: The Life-Cycle Impact on New Firms∗†
We examine the impact of enforcing non-compete covenants (CNC) on the formation and performance of new firms using matched employer-employee data on 30 US states. To identify the impact of CNC, we exploit the inter-state variation in CNC enforcement along with the fact that courts do not enforce such covenants between law firms and departing lawyers in any state. Using a difference-in-differenc...
متن کاملLocked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers
The research program of the Center for Economic Studies (CES) produces a wide range of economic analyses to improve the statistical programs of the U.S. Census Bureau. Many of these analyses take the form of CES research papers. The papers have not undergone the review accorded Census Bureau publications and no endorsement should be inferred. Any opinions and conclusions expressed herein are th...
متن کاملEvaluation of Comparativ Advantage in the Wood Products Industry in Iran
Economists believe that the development of the industry sector is for the benefit of other sectors of the economy. In 23 groups of industrial activity in classification ISIC, the production and export of wood industries have received less attention in developing countries. exports of wood products have a major impact on the GDP and provide employment and sustainable development of natural resou...
متن کاملLabor Market Mobility and Expectation Management: Evidence from Enforceability of Non-compete Provisions
This study examines how managers’ use of expectation management is affected by labor market mobility, measured with the enforceability of non-compete provisions in employment contracts. We find that managers in states with stricter non-compete enforcement are more likely to manage analyst expectations downward, consistent with labor market immobility exacerbating managers’ incentives to ensure ...
متن کامل