16 janvier 2018 Grigorios Spanos (Aix-Marseille University, CNRS, EHESS, Centrale Marseille, AMSE)
Firm Organization and Productivity Across Locations
This paper presents a new mechanism to explain variation in firm productivity across locations : variation in the degree of stratification into layers, or levels of hierarchy. I develop a theoretical model which yields two implications. First, firms in larger markets organize with a greater number of layers. Second, because of more layers, firms in larger markets are more productive. I then use administrative French data to examine the model’s implications on non-tradeable sectors. I find evidence consistent with the model. I conclude that between 6% and 33% of the productivity gains from larger markets are explained by this new mechanism.
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