Intangible assets and imperfections in product and labor markets

Eric J. Bartelsman, Sabien Dobbelaere and Alessandro Zona Mattioli

No 5/2026, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: This paper develops a micro-founded framework linking price-cost and wage markups to intangible assets. Intangible assets, once created, are a source of firm rents. Owing to limits to enforceable ownership and the non-rival nature of knowledge, these rents can be both retained by the origin firm and transferred to a competitor through poaching of workers. Search and matching frictions affect labor mobility and result in bargaining over rents between the firm and the worker. This environment generates hold-up in intangible asset creation and motivates rent sharing. Under non-compete agreements, poached workers face start delays that weaken outside options. Using microdata from the Netherlands, we document higher price-cost and wage markups in more intangible-intensive firms and lower wages for workers with non-compete agreements, consistent with the model.

Keywords: intangibles; non-compete agreements; price-cost markups; rent sharing; wage markups (search for similar items in EconPapers)
JEL-codes: J41 L10 O30 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-com and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:341089

DOI: 10.18717/dpmq58-mn93

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