Browsing Centres by Author "Motta, Massimo"
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Motta, Massimo; Rønde, Thomas (København, 2002)[More information][Less information]
Abstract: We show that when the researcher’s (observable but not contractible) contribution to innovation is crucial, a covenant not to compete (CNC) reduces effort 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. JEL Codes: J3, K2, L14, O31, O34. Keywords: Innovation, intellectual property rights, labor contracts, poaching, relational contracts, start-ups. URI: http://hdl.handle.net/10398/6800 Files in this item: 1
wplefic122002.pdf (481.6Kb)
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