The Value of Employee Retention: Evidence From a Natural Experiment

Bridging Strategic Human Capital and Employee Entrepreneurship Research: A Labor Market Frictions Approach

“…(Agarwal et al, ; Fallick et al, ; Ganco et al, ; Marx, ; Marx et al, ; Samila & Sorenson, ; Yeganegi et al, ; Younge & Marx, )…”

“…Legal structures that prevent employees from taking knowledge from a firm reduce employee mobility. For example, when firms implement non-compete agreements to constrain the ability of an employee to leave the firm and compete with the employer (Buenstorf, Engel, Fischer, & Gueth, 2016;Starr, 2016) or threaten intellectual property enforcement to prevent an employee from using the firm's knowledge in a different context (Ganco, Ziedonis, & Agarwal, 2015), they not only inhibit the willingness of employees to move to an existing firm (Agarwal, Ganco, & Ziedonis, 2009;Fallick, Fleischman, & Rebitzer, 2006;Ganco et al, 2015;Marx, 2011;Marx et al, 2009;Samila & Sorenson, 2011;Yeganegi, Laplume, Dass, & Huynh, 2016;Younge & Marx, 2016), but they also inhibit employees from forming their own firms by preventing employee entrepreneurs from imitating important aspects of their parent firm (Anton & Yao, 1995;Yeganegi et al, 2016). Intellectual property protection, thus, reduces the entrepreneurial aspirations of employees (Autio & Acs, 2010) and constrains the ability of employees to become entrepreneurs (Hellmann, 2007), especially if the parent firm values the intellectual property highly (Gambardella, Ganco, & Honoré, 2014).…”

Geographical differences in intellectual property strategies and outcomes: establishment-level analysis across the American settlement hierarchy

“…This suggests that non-compete clauses should be more prevalent in urban areas relative to rural areas; this hypothesis will be examined below. Younge and Marx (2016) also find that the value of non-compete clauses is reduced in the presence of patents, suggesting that other forms of IP protection may serve as substitutes for secrecy imposed through employment restrictions.…”

“…The regional impacts of non-compete clauses have been studied the longest, emerging as one of the explanations for why Californiawhich does not enforce noncompete clausesoutpaced Massachusetts in high-tech in the 1970s and 1980s (Saxenian, 1994). Research on the effects of non-compete clauses on individual businesses is much more limited, but the empirical consensus to date is that employee turnover is lower, employee wages are lower, and stock valuations are higher where these clauses are enforceable (Younge & Marx, 2016). A result that is most relevant for the current analysis is that the firm benefits of non-compete clauses are highest 'when there is more local competition, when employee mobility is a greater concern, and when firms have more growth opportunities' (Younge & Marx, 2016, p. 653).…”

Does Knowledge Protection Benefit Shareholders? Evidence from Stock Market Reaction and Firm Investment in Knowledge Assets

“…Previous studies primarily focus on the role of the enforcement of legal systems in the area of investor protection and show that strong law enforcement, which provides good legal protection to investors, also facilitates financial-market development and enhances firm valuation (see, e.g., La Porta, Lopezde-Silanes, Shleifer, and Vishny (1998), (2002)). Some recent studies focus on labor regulations and investigate the impacts on firm behavior (see, e.g., Fallick, Fleischman, and Rebitzer (2006), Marx, Strumsky, and Fleming (2009), Garmaise (2011), Acharya, Baghai and Subramanian (2013, Wang (2016), and Younge and Marx (2016) Serfling, and Srinivasan (2014) find that intellectual property protection affects firms' capital structure decision, and Leung, Mazouz, and Chen (2015) find that intellectual property protection benefits small firms by improving the liquidity of equity financing and reducing their costs of capital. Finally, Flammer, and Kacperczyk (2016) show that intellectual property protection affects firms' engagement in corporate social responsibility.…”