While papers such as Klepper (2002) and many others argue that technological innovations lead to shakeouts, Scherer (1965), Mansfield (1968, 1983), and Mueller (1967) suggest that market concentration and large firm size are only weakly associated with innovation. Alexander (1994) shows one case, the music industry, in which technological changes actually resulted in a de-concentration of firms (by spurring new entry).
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A frequent example used in the study of industry agglomeration is the hi-tech electronics agglomeration in Silicon Valley, California. The general problem to investigate relates to what advantages either the agglomeration in itself or Silicon Valley confers to businesses that result in agglomeration. The next-largest agglomeration in the same industries, Massachusetts’ Route 128, eventually fell far behind Silicon Valley. Franco and Mitchell (2005), citing the labor mobility-restricting legal tool of non-compete contracts (also known as covenants not to compete, or CNCs), support the earlier Gilson (1998) and Hyde (2003) argument that a legal prohibition on the enforcement CNCs in California was responsible for the differences between Silicon Valley and Route 128. Because of the innovation-dependent nature of the industry, employees working at one company could easily migrate to other companies or create their own new companies (“spin-outs” as opposed to “spin-offs”) as a result of the knowledge spillovers caused by their labor mobility. Non-compete contracts serve the function of allowing employers and employees to agree in advance to legally restrict such mobility.
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A large amount of literature has recently been dedicated to gender roles in the workplace, particularly focusing on discrimination against women in the form of lost employment opportunities or lower wages. Whatever causes this phenomenon must also be responsible, to some degree, for the significant trend of female entrepreneurs creating solo enterprises. While social interactions and prejudices can account for this discrepancy, the very sensitive issue of productivity can also enter the equation. Specifically relevant to our question is not whether women are more or less productive than men, but whether men working with women are more or less productive than men with men or women with women.[1] Read more…