IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/31487.html
   My bibliography  Save this paper

Innovation, Inventor Mobility, and the Enforceability of Noncompete Agreements

Author

Listed:
  • Matthew S. Johnson
  • Michael Lipsitz
  • Alison Pei

Abstract

Firms often restrict workers’ mobility with Noncompete Agreements (NCAs). Using state-level law changes, we find that making NCAs easier to enforce (“stricter” enforceability) leads to fewer patents, an effect that we show reflects a loss in innovation. While stricter enforceability encourages firms’ R&D investment, consistent with alleviating hold-up concerns, it also limits inventors’ job mobility and new business formation; supplementary evidence indicates the decline in mobility stifles knowledge diffusion. Analyses of technology-specific nationwide exposure, as well as cross-state spillovers via firms’ corporate networks, reveal that our state-level estimates, if anything, understate the economy-wide effects of NCA enforceability on innovation.

Suggested Citation

  • Matthew S. Johnson & Michael Lipsitz & Alison Pei, 2023. "Innovation, Inventor Mobility, and the Enforceability of Noncompete Agreements," NBER Working Papers 31487, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31487
    Note: LS PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w31487.pdf
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:31487. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.