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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

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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Bibliographic Info

Article provided by Wiley Blackwell 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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Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/

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Web: http://www.blackwellpublishing.com/journal.asp?ref=1058-6407&site=1

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Cited by:
  1. Perri Timothy J., 2010. "Garden Leave vs. Covenants Not to Compete," Review of Law & Economics, De Gruyter, De Gruyter, vol. 6(2), pages 167-179, August.
  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.
  3. Ann-Kathrine Ejsing & Ulrich Kaiser & Hans Christian Kongsted & Keld Laursen, 2013. " The Role of University Scientist Mobility for Industrial Innovation," Working Papers 336, University of Zurich, Department of Business Administration (IBW).
  4. Da Rin, M. & Hellmann, T. & Puri, M.L., 2011. "A Survey of Venture Capital Research," Discussion Paper, Tilburg University, Center for Economic Research 2011-111, Tilburg University, Center for Economic Research.
  5. Guido Bünstorf & Christoph Engel & Sven Fischer & Werner Güth, 2013. "Win Shift Lose Stay - An Experimental Test of Non-Compete Clauses," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2013_17, Max Planck Institute for Research on Collective Goods.
  6. Ulrich Kaiser & Hans Christian Kongsted & Thomas Ronde, 2013. " Does the Mobility of R & D Labor Increase Innovation?," Working Papers 336, University of Zurich, Department of Business Administration (IBW).
  7. Zhu Wang & Luis Cabral, 2013. "Spin-offs: Theory and Evidence from the Early U.S. Automobile Industry," 2013 Meeting Papers, Society for Economic Dynamics 942, Society for Economic Dynamics.
  8. Matt Marx & Lee Fleming, 2012. "Non-compete Agreements: Barriers to Entry…and Exit?," NBER Chapters, in: Innovation Policy and the Economy, Volume 12, pages 39-64 National Bureau of Economic Research, Inc.
  9. Evan Starr & Natarajan Balasubramanian & Mariko Sakakibara, 2014. "Enforcing Covenants Not To Compete: The Life-Cycle Impact On New Firms," Working Papers 14-27, Center for Economic Studies, U.S. Census Bureau.
  10. Bozkaya, Ant & Kerr, William R., 2013. "Labor regulations and European venture capital," Research Discussion Papers 30/2013, Bank of Finland.

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