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Covenants not to Compete, Labor Mobility, and Industry Dynamics

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Author Info
April M. Franco
Matthew F. Mitchell

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Abstract

"Conventional wisdom among legal scholars is that contractual restrictions on employee mobility affect turnover and led to the overtaking of Massachusetts' Route 128 by Silicon Valley. We study a model of employee mobility in the spirit of Pakes and Nitzan 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 firms that start as, or generate, spin-outs." Copyright (c) 2008, The Author(s) Journal Compilation (c) 2008 Wiley Periodicals, Inc..

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Economics & Management Strategy.

Volume (Year): 17 (2008)
Issue (Month): 3 (09)
Pages: 581-606
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Handle: RePEc:bla:jemstr:v:17:y:2008:i:3:p:581-606

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  1. Peter Thompson & Jing Chen, 2009. "Employee Spinoffs and the Solipsistic Entrepreneur," Working Papers 0910, Florida International University, Department of Economics. [Downloadable!]
  2. Selvaggi, Marianao & Vasconcelos, Luis, 2006. "Star Wars: Exclusive Superstars and Collusive Outcomes," FEUNL Working Paper Series wp496, Universidade Nova de Lisboa, Faculdade de Economia. [Downloadable!]
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This page was last updated on 2009-11-22.

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