 Firm organization and productivity across locationsGrigorios Spanos Journal of Urban Economics, 2019, vol. 112, issue C, 152-168 Abstract: This paper provides a new mechanism to explain variation in firm productivity across locations: variation in the internal organization of labor into hierarchical layers, which are associated with different responsibilities within the firm. To guide my analysis, I develop a theoretical model that yields two implications. First, firms in larger markets organize into a greater number of layers. Second, because they have more layers, firms in larger markets are more productive. I then use administrative data to examine the model’s implications across French employment areas and non-tradeable service industries that satisfy the model’s assumptions: Clothing and Shoe Retail, Traditional Restaurants, and Hair and Beauty Salons. The findings are consistent with the model. I also observe that 8.8% to 22.4% of the log productivity gains from denser areas arise from differences in the organization of firms. A separate analysis shows that results are similar across firms operating in the manufacturing sector. Keywords: Firm organization; Heterogeneous firms; Market size; Density; Regional disparities; Wages; Firm productivity (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:juecon:v:112:y:2019:i:c:p:152-168 DOI: 10.1016/j.jue.2019.05.006 Access Statistics for this article Journal of Urban Economics is currently edited by S.S. Rosenthal and W.C. Strange More articles in Journal of Urban Economics from Elsevier |
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