Networks which span organizational boundaries are an important source of knowledge. According to literature they provide flexible access to new knowledge. This paper aims to explore and understand the utilization of highly skilled contractors with regards to organizational knowledge. Based on the theory of social capital and empirical data a grounded theoretical framework is developed. The fram...

We consider a tournament between two workers of different abilities who choose both human capital investment and effort. The employer can influence the workers’ behavior by determining the sequence of human capital investments, i.e. the training design. The workers can either invest simultaneously or sequentially with the favorite being the first mover or sequentially with the underdog as first...

This paper focuses on the relationship between the venture capitalist and the entrepreneur. In particular, it analyses how both players’ unobservable effort levels affect the equity share that the entrepreneur is willing to cede to the venture capitalist. We solve the entrepreneur’s maximization problem in the presence of double-sided moral hazard. In this scenario, we show that the venture cap...

We show how labour market restrictions, such as firing costs, and bail-outs may arise as useful institutions to support investment in specific human capital. The specificity of human capital is determined endogenously. While specific human capital is more productive than the general human capital, it cannot be reallocated across industries. Accordingly, the optimal fraction of individuals with ...

The cost of public investment is not the value of public capital. Unlike with private investors, there is no plausible behavioral model in which every dollar that the public sector spends as “investment” creates capital in an economic sense. While this simple analytic point is obvious, it has so far been uniformly ignored in the empirical literature on economic growth which uses, at best, cumul...