Non-competes and Spinout Creation: A Cross-country Test of the Relationship with Individual Income

Abstract

This crosscountry study suggests that non-competes are not serving parent firms' intended purpose of discouraging the spinouts by higher earning employees. Instead, they have an untended consequence of mainly blocking the wrong types of spawn-that is, spinouts by lower earning employees.

Global Innovative R&D Offshoring with Heterogeneous Labor: The Role of IPR‐Protection on Technology Transfer and the Brain Drain Effect

“…This assumption implies that lower ability researchers are more affected by stronger IPR‐protection laws than higher ability researchers. Laplume, Yeganegi and Dass () use the education and income levels of employees along with survey evidence to show that non‐compete institutions are more effective at preventing employee entrepreneurship for low ability workers. As argued by the authors, higher ability researchers are more likely to have the ability and resources to overcome any legal barriers to entry.…”