Bartelsman, E., Dobbelaere, S. and Zona Mattioli, A. (2026). Intangible assets and imperfections in product and labor markets European Economic Review, 186:1--32.

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.