Productivity and Organization in Portuguese Firms

Giordano Mion, Esteban Rossi-Hansberg, Luca David Opromolla and Lorenzo Caliendo

No 10993, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The productivity of firms is, at least partly, determined by a firm's actions and decisions. One of these decisions involves the organization of production in terms of the number of layers of management the firm decides to employ. Using detailed employer-employee matched data and firm production quantity and input data for Portuguese firms, we study the endogenous response of revenue-based and quantity-based productivity to a change in layers: a firm reorganization. We show that as a result of an exogenous demand or productivity shock that makes the firm reorganize and add a management layer, quantity-based productivity increases by about 8%, while revenue-based productivity drops by around 7%. Such a reorganization makes the firm more productive, but also increases the quantity produced to an extent that lowers the price charged by the firm and, as a result, its revenue-based productivity.

Keywords: Firm size; Layers; Managers; Organization; Productivity; TFP; Wages (search for similar items in EconPapers)
JEL-codes: D22 D24 F16 J24 J31 L23 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-cse, nep-eff, nep-lma and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Productivity and Organization in Portuguese Firms (2020)
Working Paper: Productivity and Organization in Portuguese Firms (2019)
Working Paper: Productivity and Organization in Portuguese Firms (2016)
Working Paper: Productivity and Organization in Portuguese Firms (2015)
Working Paper: Productivity and Organization in Portuguese Firms (2015)
Working Paper: Productivity and organization in Portuguese firms (2015)
Working Paper: Productivity and Organization in Portuguese Firms (2015)
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