The Anatomy of French Production Hierarchies

Lorenzo Caliendo, Ferdinando Monte and Esteban Rossi-Hansberg

No 1867, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We use a comprehensive dataset of French manufacturing firms to study their internal organization. We first divide the employees of each firm into 'layers' using occupational categories. Layers are hierarchical in that the typical worker in a higher layer earns more, and the typical firm occupies less of them. In addition, the probability of adding (dropping) a layer is very positively (negatively) correlated with value added. We then explore the changes in the wages and number of employees that accompany expansions in layers, output, or markets (by becoming exporters). The empirical results indicate that reorganization, through changes in layers, is key to understand how firms expand and contract. For example, we find that firms that expand substantially add layers and pay lower average wages in all pre-existing layers. In contrast, firms that expand little and do not reorganize pay higher average wages in all pre-existing layers.

JEL-codes: D22 F16 J24 J31 L23 (search for similar items in EconPapers)
Pages: 75 pages
Date: 2012-07
New Economics Papers: this item is included in nep-bec, nep-hme, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published in Journal of Political Economy (August 2015), 123(4): 809-852

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Journal Article: The Anatomy of French Production Hierarchies (2015)
Working Paper: The Anatomy of French Production Hierarchies (2012)
Working Paper: The Anatomy of French Production Hierarchies (2012)
Working Paper: The Anatomy of French Production Hierarchies (2012)
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