Management of Knowledge Workers

Hvide, Hans K.; Kristiansen, Eirik Gaard

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Management of Knowledge Workers

CEPR Discussion Paper No. 6039

30 Pages Posted: 27 Jun 2007

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

There are 3 versions of this paper

Date Written: January 2007

Abstract

We study how complementarities and intellectual property rights affect the management of knowledge workers. The main results relay 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 strongly protected by property rights may not sue leaving workers in order to motivate effort, while firms weakly protected by complementary assets must sue in order to obtain positive profits. Firms with more complementary assets pay higher wages (and have lower turnover), but such higher pay has a detrimental effect on worker initiative. Our analysis suggests that strengthened property rights protection reduces turnover costs but weakens worker initiative.

Keywords: Entrepreneurship, Innovation, IPR, Litigation, Personnel economics, R&D, Start-ups

JEL Classification: E00

Suggested Citation: Suggested Citation

Hvide, Hans and Kristiansen, Eirik Gaard, Management of Knowledge Workers (January 2007). CEPR Discussion Paper No. 6039, Available at SSRN: https://ssrn.com/abstract=996904