Trade secret laws, labor mobility, and innovations

Arbeitspapier

We show that when the researcher’s (observable but not contractible) contribution to innovation is crucial, a covenant not to compete (CNC) reduces e.ort and profits under both spot and relational contracts. Having no CNC allows the researcher to leave for a rival. This alleviates a commitment problem by forcing the firm to reward a successful researcher. However, if the firm’s R&D investment mainly matters, including a CNC in the contract is optimal, as it ensures the firm’s incentives to invest.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working paper ; No. 8-2002

Classification and Topics

• Classification: Wirtschaft ; Wages, Compensation, and Labor Costs: General ; Regulation and Business Law: General ; Transactional Relationships; Contracts and Reputation; Networks ; Innovation and Invention: Processes and Incentives ; Intellectual Property and Intellectual Capital
• Subject: Innovation ; intellectual property rights ; labor contracts ; poaching ; relational contracts ; start-ups

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Motta, Massimo ; Rønde, Thomas
• Event: Veröffentlichung
• (who): Copenhagen Business School (CBS), Department of Economics
• (where): Frederiksberg
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/208457
• Last update: 10.03.2025, 11:43 AM CET