The Life Cycle of Businesses and Their Internal Organization

Elizabeth Handwerker, Sara Moreira and David Piccone

AEA Papers and Proceedings, 2021, vol. 111, 587-92

Abstract: We document new stylized facts on the occupational mix of businesses in the United States and how their internal organization evolves over their life cycles. Our main empirical finding is that younger businesses have fewer hierarchical layers and lower span of control than comparable older businesses do. Our results suggest that businesses become simultaneously more hierarchical and increase their managerial span of control over their life cycles. We show that this pattern is not entirely driven by selection or differences in size and is pervasive across cohorts and sectors.

JEL-codes: D25 M12 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1257/pandp.20211121

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