Hvide, Hans K. () (University of Aberdeen Business School) Kristiansen, Eirik G. () (Dept. of Economics, Norwegian School of Economics and Business Administration)
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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 Department of Finance and Management Science, Norwegian School of Economics and Business Administration in its series Discussion Papers with number
2006/7.
Length: 28 pages Date of creation: 04 Aug 2006 Date of revision: Handle: RePEc:hhs:nhhfms:2006_007
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Find related papers by JEL classification: K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups M50 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - General O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
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