Management Quality and Firm Hierarchy in Industry Equilibrium

• 成果类型: Article
• 署名作者: Chen, Cheng
• 署名单位: University of Hong Kong
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20160305
• 发表日期: 2017
• 页码: 203-244
• 关键词: knowledge economy; trade-off; ORGANIZATION; supervision; PRODUCTIVITY; size; incentives; INEQUALITY; CONTRACTS; countries

摘要

I incorporate a monitoring-based firm hierarchy into an industry equilibrium model with heterogeneous firms. I then use the theory to study aggregate impacts of an economy-wide improvement in monitoring efficiency. This shock generates a selection effect, which favors more hierarchical (i.e., more layers) firms. Interestingly, these implications depend on firms' heterogeneous choices about their hierarchy and completely disappear when firms are homogeneous in terms of the number of layers inside the hierarchy.