DP10993 Productivity and Organization in Portuguese Firms

Caliendo, Lorenzo, Mion, Giordano, Opromolla, Luca David and Rossi-Hansberg, Esteban (2015) DP10993 Productivity and Organization in Portuguese Firms. Discussion Paper. Centre for Economic Policy Research, London.

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Abstract

The productivity of firms is, at least partly, determined by a firm’s actions and decisions. One of these decisions involves the organization of production in terms of the number of layers of management the firm decides to employ. Using detailed employer-employee matched data and firm production quantity and input data for Portuguese firms, we study the endogenous response of revenue-based and quantity-based productivity to a change in layers: a firm reorganization. We show that as a result of an exogenous demand or productivity shock that makes the firm reorganize and add a management layer, quantity-based productivity increases by about 4%, while revenue-based productivity drops by more than 4%. Such a reorganization makes the firm more productive, but also increases the quantity produced to an extent that lowers the price charged by the firm and, as a result, its revenue-based productivity.

Item Type: Reports and working papers (Discussion Paper)
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences
Related URLs:
Depositing User: Tahir Beydola
Date Deposited: 07 Jan 2016 15:59
Last Modified: 13 Jun 2016 14:55
URI: http://sro.sussex.ac.uk/id/eprint/59011
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