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Firm export diversification and change in workforce composition

Sarah Guillou () and Tania Treibich ()

No 2017-22, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: The objective of this paper is to show that part of the fixed cost of firms’ trade expansion is due to the acquisition of new internal capabilities (e.g. technology, production processes or skills), which imply a costly change in the firm’s internal labor organisation. We investigate the relationship between a firm’s structure of labor, in terms of relative number of managers, and the scope of its export portfolio, in terms of product-destination varieties. The empirical analysis is based on a matched employer- employee dataset covering the population of French firms from tradable sectors over theperiod 2009-2014. Our analysis suggests that market expansion, and in particular export diversification, is associated with a change in the firm’s workforce composition, namely an increase in the number of managerial layers and in the ratio of managers. We show how these results are consistent with a simple model where the complexity of a firm’s operations increases in the number of product-destination couples exported, and where managers’ role is to address the unsolved problems arising from such increased complexity of operations.

Keywords: Export diversification; Managers; Occupations; Employer-Employee data. (search for similar items in EconPapers)
JEL-codes: F16 E24 C14 D22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-int, nep-lma and nep-mac
Date: 2017-10-09
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Working Paper: Firm export diversification and change in workforce composition (2019) Downloads
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