Turbulence. Firm Decentralization. and Growth in Bad Times

• 成果类型: Article
• 署名作者: Aghion, Philippe; Bloom, Nicholas; Lucking, Brian; Sadun, Raffaella; Van Reenen, John
• 署名单位: Universite PSL; College de France; Stanford University; National Bureau of Economic Research; Harvard University; University of London; London School Economics & Political Science
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20180752
• 发表日期: 2021
• 页码: 133-169
• 关键词: flattening firm; ORGANIZATION; INFORMATION; authority; COMMUNICATION; COORDINATION; TECHNOLOGY; INVESTMENT; CONTRACTS; panel

摘要

What is the optimal form of firm organization during bad times? The greater turbulence following macro shocks may benefit decentralized firms because the value of local information increases (the localist view). On the other hand, the need to make tough decisions may favor centralized firms (the centralist view). Using two large micro datasets on decentralization in firms in ten OECD countries (WMS) and US establishments (MOPS administrative data), we find that firms that delegated more power from the central headquarters to local plant managers prior to the Great Recession outperformed their centralized counterparts in sectors that were hardest hit by the subsequent crisis (as measured by export growth and product durability). Results based on measures of turbulence based on product churn and stock market volatility provide further support to the localist view This conclusion is robust to alternative explanations such as managerial fears of bankruptcy and changing coordination costs. Although decentralization will be suboptimal in many environments, it does appear to be beneficial for the average firm during bad times.