Noncompete Covenants: Incentives to Innovate or Impediments to Growth

Sampsa Samila · Olav Sorenson

228 citations0/0 files storedManagement Science

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Entrepreneurship Studies and Influences Firm Innovation and Growth Private Equity and Venture Capital

Abstract

We find that the enforcement of non-compete clauses significantly impedes entrepreneurship and regional growth. Based on a panel of metropolitan areas in the United States from 1993 to 2002, our results indicate that, relative to regions in states that enforce non-compete covenants, an increase in the local supply of venture capital in states that restrict them has significantly stronger positive effects on (i) the number of patents, (ii) the number of firm starts, and (iii) employment. We address potential endogeneity issues in the supply of venture capital by using endowment returns as an instrumental variable. Our results point to a strong interaction between financial intermediation and the legal regime in promoting entrepreneurship and growth.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 228 citations exist upstream.

References

1991Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations 1995Corruption and Growth 1993Finance and Growth: Schumpeter Might Be Right 1983Human Capital 1996The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect 1996Stock Markets, Banks, and Economic Growth 1951SOME THOUGHTS ON THE DISTRIBUTION OF EARNINGS 1 2001Recombinant Uncertainty in Technological Search

Cited by

2014Talent Management: Conceptual Approaches and Practical Challenges 2009Spinoffs: A review and synthesis 2021Noncompete Agreements in the US Labor Force 2016Law and Innovation: Evidence from State Trade Secrets Laws 2015Employee Mobility and Organizational Outcomes 2019Consider This: Training, Wages, and the Enforceability of Covenants Not to Compete

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.