SMITHIAN GROWTH THROUGH CREATIVE ORGANIZATION

• 成果类型: Article
• 署名作者: Legros, Patrick; Newman, Andrew F.; Proto, Eugenio
• 署名单位: Centre for Economic Policy Research - UK; Boston University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00421
• 发表日期: 2014-12
• 页码: 796-811
• 关键词: incentive contracts; LABOR; MODEL

摘要

We model technological progress as an external effect of organizational design, focusing on how factories, based on labor division, could spawn the Industrial Revolution. Dividing labor, as Adam Smith argued, facilitates invention by observers of production processes. However, entrepreneurs cannot internalize this benefit and choose labor division to facilitate monitoring. Equilibrium with few entrepreneurs features low wage shares, and high specialization, but a limited market for innovations. Conversely, with many entrepreneurs, there is a large market for innovation but little specialization because of high wage shares. Technological progress therefore occurs with a moderate scarcity of entrepreneurs. Institutional improvements affect growth ambiguously.