We study how complementarities and intellectual property rights affect the management of knowledge workers. The main results relay when a firm will wish to sue workers that leave with innovative ideas, and the effects of complementary assets on wages and on worker initiative. We argue that firms strongly protected by property rights may not sue leaving workers in order to motivate effort, while firms weakly protected by complementary assets must sue in order to obtain positive profits. Firms with more complementary assets pay higher wages (and have lower turnover), but such higher pay has a detrimental effect on worker initiative. Our analysis suggests that strengthened property rights protection reduces turnover costs but weakens worker initiative.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
6039.
Hvide, Hans K. & Kristiansen, Eirik G., 2006.
"Management of Knowledge Workers,"
Discussion Papers
2006/7, Department of Finance and Management Science, Norwegian School of Economics and Business Administration.
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Find related papers by JEL classification: E00 - Macroeconomics and Monetary Economics - - General - - - General
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