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Trade in Tasks and the Organization of Firms

Jan Schymik (), Dalia Marin () and Alexander Tarasov ()

VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy from Verein für Socialpolitik / German Economic Association

Abstract: We incorporate trade in tasks l a Grossman and Rossi-Hansberg (2008) into the international trade theory of fi rm organization of Marin and Verdier (2012) to examine how off shoring aff ects the way fi rms organize. We test the predictions of the model based on firm level data of 660 Austrian and German multinational firms with 2200 subsidiaries in Eastern Europe and we show that the data are consistent with the theory. We fi nd that o ffshoring of production tasks leads firms to reorganize to more decentralized management improving competitiveness of offshoring firms. We show further that offshoring of skilled managers relaxes the 'war for talent' constraint but toughens competition and thus has an ambiguous impact on the level of decentralization and CEO wages of offshoring firms. In sufficiently open economies, however, managerial offshoring unambiguously leads to more decentralized management.

JEL-codes: F10 F23 L22 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-bec and nep-int
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Citations: View citations in EconPapers (10) Track citations by RSS feed

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Related works:
Journal Article: Trade in tasks and the organization of firms (2018) Downloads
Working Paper: Trade in Tasks and the Organization of Firms (2018) Downloads
Working Paper: Trade in tasks and the organization of firms (2018)
Working Paper: Trade in Tasks and the Organization of Firms (2015) Downloads
Working Paper: Trade in Tasks and the Organization of Firms (2014) Downloads
Working Paper: Trade in Tasks and the Organization of Firms (2014) Downloads
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