How Organizational Hierarchy Affects Information Production

• 成果类型: Article
• 署名作者: Skrastins, Janis; Vig, Vikrant
• 署名单位: Washington University (WUSTL); University of London; London Business School
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy071
• 发表日期: 2019
• 页码: 564
• 关键词: distance; COMMUNICATION; COMPETITION; authority; MARKET; FIRMS

摘要

We exploit a variation in organizational hierarchy induced by a reorganization plan implemented in roughly 2,000 bank branches in India. We do so to investigate how organizational hierarchy affects the allocation of credit. We find that increased hierarchization of a branch induces credit rationing, reduces loan performance, and generates standardization in loan contracts. Additionally, we find that hierarchical structures perform better in environments characterized by a high degree of corruption, highlighting the benefits of hierarchies in restraining rent-seeking activities. Overall, our results are consistent with the view that valuable information may be lost in hierarchical structures.