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Organizational Hierarchies in the Slovenian Manufacturing Sector

Santiago Bonilla and Sašo Polanec

MPRA Paper from University Library of Munich, Germany

Abstract: We study organizational hierarchies in a transition country. Using employer-employee matched data for a set of Slovenian manufacturing firms, we find strong support for the key hypotheses of the knowledge-based hierarchies proposed by Garicano (2000) and Caliendo and Rossi-Hansberg (2012). According to these theories, firms should organize in consecutively ordered layers with less hours and higher wages in higher layers. Following Caliendo, Monte, and Rossi-Hansberg (2015b), who were the first to test the predictions of knowledge-based theories of organizational hierarchies, we are able to directly compare our results to those obtained for French manufacturing firms. We find that Slovenian firms exhibit lower consistency with consecutive ordering of organizational layers, have on average fewer organizational layers and change them less frequently. We attribute lower organizational depth to the higher wage premia to workers in higher organizational layers, which is an implication of under-investment in human capital during the socialist era.

Keywords: Organizational hierarchies; human capital; wages (search for similar items in EconPapers)
JEL-codes: D21 D24 J24 J31 (search for similar items in EconPapers)
Date: 2020-09-13
New Economics Papers: this item is included in nep-hrm and nep-knm
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