TDPE presents: Natarajan Balasubramanian
204 Maxwell
Add to: Outlook, ICal, Google Calendar
Natarajan Balasubramanian on "Screening Spinouts? How Noncompete Enforceability Affects the Creation, Growth, and Survival of New Firms"
Natarajan Balasubramanian, Whitman School of Management, Syracuse University
This paper examines how the enforceability of noncompete covenants affects the creation, growth, and survival of spinouts and other new entrants. The impact of noncompete enforceability on new firms is ambiguous, since noncompetes reduce knowledge leakage but impose hiring costs. However, we posit that enforceability screens formation of within-industry spinouts (WSOs) relative to non-WSOs by dissuading founders with lower human capital. Using data on 5.5 million new firms, we find greater enforceability is associated with fewer WSOs, but relative to non-WSOs, WSOs that are created tend to start and stay larger, are founded by higher-earners, and are more likely to survive their initial years. In contrast, we find no impact on non-WSO entry, and a negative effect on size and short-term survival.
Authors:Evan Starr, University of Maryland
Natarajan Balasubramanian, Syracuse University
Mariko Sakakibara, University of California, Los Angeles
Open to the public.
Open to
Public
Contact
Accessibility
Contact to request accommodations
We’re Turning 100!
To mark our centennial in the fall of 2024, the Maxwell School will hold special events and engagement opportunities to celebrate the many ways—across disciplines and borders—our community ever strives to, as the Oath says, “transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us.”
Throughout the year leading up to the centennial, engagement opportunities will be held for our diverse, highly accomplished community that now boasts more than 38,500 alumni across the globe.