 Corporate hierarchies and international trade: Theory and evidenceDalia Marin and Thierry Verdier PSE-Ecole d'économie de Paris (Postprint) from HAL Abstract: Corporate organization varies within countries and between countries. We develop a theory which explains the variation in levels of decentralization across firms and links it to the trade environment that firms face. We introduce firms with internal hierarchies in a Melitz and Ottaviano (2008) model of international trade. We show that international trade increases the conflict of interest between CEO/owners and middle managers within firms and these eventually lead to decentralized corporate hierarchies. We test the theory with original data on the internal organizations of 2200 Austrian and German firms and find that the empirical evidence is consistent with the model's predictions. Keywords: Empirical test of the theory of trading firms; Endogenous congruence in the firm; Corporate organization in similar countries; Decentralized management and trade; International trade with endogenous firm organizations (search for similar items in EconPapers) Published in Journal of International Economics, 2014, 94 (2), pp.295-310. ⟨10.1016/j.jinteco.2014.08.002⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-01109476 DOI: 10.1016/j.jinteco.2014.08.002 Access Statistics for this paper More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL |
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