 Spatial wage differentials, geographic frictions and the organization of labor within firmsCamilo Acosta and Ditte Håkonsson Lyngemark Regional Science and Urban Economics, 2025, vol. 114, issue C Abstract: This paper studies the spatial organization of firms, both theoretically and empirically. Two new facts in Danish register data motivate the analysis: (i) firms have become increasingly spatially fragmented, and (ii) headquarters (HQ) establishments have become more manager-intensive. We develop and estimate a structural model in which firms allocate labor across establishments and produce non-rival, manager-intensive HQ services. Identification relies on exogenous variation in labor supply induced by commuting-augmented immigration shocks. We estimate elasticities of substitution across establishments of −9.8 for workers and −1.1 for managers, consistent with firms reallocating general labor more easily than managerial inputs. Our decomposition shows that rising managerial wages at HQs – interacted with firm-level scale effects – explain about half of the observed increase in HQ managerial intensity, highlighting the importance of intangible internal inputs in shaping firm spatial structure. Keywords: Firm organization; Multi-establishment firms; Wages; Communication costs; Agglomeration (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:114:y:2025:i:c:s0166046225000456 DOI: 10.1016/j.regsciurbeco.2025.104128 Access Statistics for this article Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou More articles in Regional Science and Urban Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.