Noncompetes and inventor mobility
Subtitle: specialists, stars, and the Michigan experiment
By: Matt Marx, Deborah Strumsky, Lee Fleming
Contributors: Strumsky, Deborah; Fleming, Lee, 1955-; Harvard Business School. Division of Research
Series: Working paper / Division of Research, Harvard Business School -- 07-042; Working paper (Harvard Business School. Division of Research) -- 07-042
Publisher: Division of Research, Harvard Business School
Published: 2007
Place of publication: Boston]
Language: eng
Number of pages: 32
Description: Several scholars have documented the positive consequences of job-hopping by inventors, including knowledge spillovers and agglomeration and the concentration of spinoffs. This work investigates a possible antecedent of inventor mobility: regional variation in the enforcement of postemployment noncompete covenants. While previous research on non-competes has been largely focused on California and Silicon Valley, we exploit Michigan's inadvertent reversal of its noncompete enforcement legislation as a natural experiment to investigate the impact of noncompetes on mobility. Using the U.S. patent database and a differences-in-differences approach between inventors in states that did not enforce and did not change enforcement of non-compete laws, we find that relative mobility decreased by 34% in Michigan after the state reversed its policies. Moreover, this effect was amplified 14% for "star" inventors and 17% for "specialist" inventors.
Notes: "January 17, 2007"--Added t.p.

Includes bibliographical references.