The Persistence of Differences in Productivity, Wages, Skill Mixes and Profits Between Firms

Katsuya Takii

No 07E002, OSIPP Discussion Paper from Osaka School of International Public Policy, Osaka University

Abstract: In this paper, we construct a dynamic assignment model that can provide a unified explanation of several observed features of persistent differences in productivity, wages, skill mixes and profits between firms. Large organization capital (high firm-specific knowledge) attracts skilled workers, who can create further organization capital in the future. This positive feedback brings about persistent differences in these variables. We also analyze how the real and perceived values of a firm's organization capital interactively influence persistence. We estimate parameters and simulate the model. Our results show that a positive assignment mechanism accounts for a large part of the observed persistence.

Keywords: Organization Capital; Assignment; Persistence (search for similar items in EconPapers)
JEL-codes: J24 L25 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2007-03
New Economics Papers: this item is included in nep-bec, nep-dge and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Persistence of Differences in Productivity, Wages, Skill Mixes and Profits Between Firms (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:osp:wpaper:07e002

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