Employee Non-compete Agreements, Gender, and Entrepreneurship

• 成果类型: Article
• 署名作者: Marx, Matt
• 署名单位: Cornell University
• 刊物名称: ORGANIZATION SCIENCE
• ISSN/ISSBN: 1047-7039
• DOI: 10.1287/orsc.2021.1506
• 发表日期: 2022
• 页码: 1756-1772
• 关键词: non-compete agreements; entrepreneurship; GENDER

摘要

I contribute to the literature on institutions, gender, and entrepreneurship by showing that macrolevel institutional policies that do not explicitly target women nonetheless discourage them from leveraging prior professional experience-their own and that of others-in founding new ventures. Most ventures fail, but chances of success are greater if founders can bring to bear their professional expertise. However, employee non-compete agreements enjoin workers from leaving their employer to found a rival business in the same industry. Thus, non-competes add legal risk to business risk. To the extent that women exhibit greater risk aversion, the threat of litigation from their ex-employer may act as a sharper brake on startup activity than for men. Examining all workers who were employed exclusively within 25 states and the District of Columbia from 1990 to 2014, I find that women subject to tighter non-compete policies were less likely to leave their employers and start rival businesses. Non-competes increase the risk of entrepreneurship by making it harder to hire talent with relevant experience, shifting women away from higher potential ventures. A review of thousands of filed lawsuits suggests that firms do not target women in non-compete cases. Rather, it appears that non-competes disproportionately discourage women from leveraging their professional networks in hiring the sort of talent necessary for high-growth startups to succeed.