2007): “Management of Knowledge Workers

We study how \u85rm-speci\u85c complementary assets and intellectual property rights a¤ect the management of knowledge workers. The main results show when a \u85rm will wish to sue workers that leave with innovative ideas, and the e¤ects of comple-mentary assets on wages and on worker initiative. We argue that \u85rms protected weakly by complementary assets must sue leaving workers in order to obtain posi-tive pro\u85ts. Moreover, \u85 rms with more complementary assets pay higher wages and have lower turnover, but the higher pay has a detrimental e¤ect on worker initiative. Finally, our analysis suggests that strengthening \u85rmsproperty rights protection reduces turnover costs but weakens worker initiative