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ECM - École Centrale de Marseille : UMR7316 (Pôle de l'étoile - Technopole de Château-Gombert - 38 rue Frédéric Joliot-Curie - 13013 Marseille - France)
Abstract : This paper provides a new mechanism to explain variation in firm productivity across locations: variation in the internal organization of labor into hierarchical layers, which are associated with different responsibilities within the firm. To guide my analysis, I develop a theoretical model that yields two implications. First, firms in larger markets organize into a greater number of layers. Second, because they have more layers, firms in larger markets are more productive. I then use administrative data to examine the model’s implications across French employment areas and non-tradeable service industries that satisfy the model’s assumptions: Clothing and Shoe Retail, Traditional Restaurants, and Hair and Beauty Salons. The findings are consistent with the model. I also observe that 8.8% to 22.4% of the log productivity gains from denser areas arise from differences in the organization of firms. A separate analysis shows that results are similar across firms operating in the manufacturing sector.
https://hal-amu.archives-ouvertes.fr/hal-02271020 Contributor : Accord Elsevier CCSDConnect in order to contact the contributor Submitted on : Monday, October 25, 2021 - 2:20:01 PM Last modification on : Thursday, February 24, 2022 - 4:32:01 PM Long-term archiving on: : Wednesday, January 26, 2022 - 8:36:23 PM