Management of Knowledge Workers

Hvide, Hans K.; Kristiansen, Eirik Gaard

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Management of Knowledge Workers

IZA Discussion Paper No. 6609

47 Pages Posted: 16 Jun 2012 Last revised: 9 May 2025

See all articles by Hans K. Hvide

Hans K. Hvide

University of Bergen - Department of Economics; University of Aberdeen - Business School; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Eirik Gaard Kristiansen

NHH Norwegian School of Economics; NHH Norwegian School of Economics - Department of Economics

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Abstract

We study how firm-specific complementary assets and intellectual property rights affect the management of knowledge workers. The main results show when a firm will wish to sue workers that leave with innovative ideas, and the effects of complementary assets on wages and on worker initiative. We argue that firms protected weakly by complementary assets must sue leaving workers in order to obtain positive profits. Moreover, firms with more complementary assets pay higher wages and have lower turnover, but the higher pay has a detrimental effect on worker initiative. Finally, our analysis suggests that strengthening firms' property rights protection reduces turnover costs but weakens worker initiative.

Keywords: start-ups, R&D, personnel economics, litigation, intellectual property rights, innovation, entrepreneurship, worker mobility

JEL Classification: J30, J60

Suggested Citation: Suggested Citation

Hvide, Hans and Kristiansen, Eirik Gaard, Management of Knowledge Workers. IZA Discussion Paper No. 6609, Available at SSRN: https://ssrn.com/abstract=2085196