Come Together: Firm Boundaries and Delegation

Laura Alfaro, Nicholas Bloom, Paola Conconi, Harald Fadinger, Patrick Legros, Andrew F Newman, Raffaella Sadun and John van Reenen

Journal of the European Economic Association, 2024, vol. 22, issue 1, 34-72

Abstract: We jointly study firm boundaries and the allocation of decision rights within them by confronting an incomplete-contracts model with data on vertical integration and delegation for thousands of firms around the world. Integration has an option value: it confers authority to delegate or centralize decision rights, depending on who can best solve problems that arise in the course of an uncertain production process. In line with the model’s predictions, we find that firms are more likely to integrate suppliers that produce more valuable inputs and operate in industries with more dispersed productivity, and that firms delegate more decisions to integrated suppliers that produce more valuable inputs and operate in more productive industries.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/jeea/jvad027 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Come together: firm boundaries and delegation (2024)
Working Paper: Come Together: Firm Boundaries and Delegation (2023)
Working Paper: Come Together: Firm Boundaries and Delegation (2019)
Working Paper: Come Together: Firm Boundaries and Delegation (2018)
Working Paper: Come Together: Firm Boundaries and Delegation (2018)
Working Paper: Come together: firm boundaries and delegation (2018)
Working Paper: Come Together: Firm Boundaries and Delegation (2018)
Working Paper: Come Together: Firm Boundaries and Delegation (2018)
Working Paper: Come Together: Firm Boundaries and Delegation (2018)
Working Paper: Come together: firm boundaries and delegation (2018)
Working Paper: Come Together: Firm Boundaries and Delegation (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:22:y:2024:i:1:p:34-72.

Access Statistics for this article

Journal of the European Economic Association is currently edited by Romain Wacziarg

More articles in Journal of the European Economic Association from European Economic Association
Bibliographic data for series maintained by Oxford University Press ().