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Conference Paper: Management Quality, Firm Organization and International Trade
Title | Management Quality, Firm Organization and International Trade |
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Authors | |
Keywords | Management Firm organization and productivity Trade liberalization Institutions and development |
Issue Date | 2014 |
Publisher | Society for Economic Dynamics Annual Meeting, SED 2015. The Conference program's website is located at http://editorialexpress.com/conference/SED2015/program/SED2015.html |
Citation | The 2015 Annual Conference of the Society for Economic Dynamics (SED 2015), Warsaw, Poland, 25-27 June 2015. How to Cite? |
Abstract | The quality of management technology that is used to monitor and incentivize workers varies substantially across countries. To understand the impact of this on economic activities, I develop a two-sector model in which firms facing heterogeneous demands set up hierarchies to manage the production processes in a monopolistically competitive sector. Entrepreneurs decide the number of hierarchical layers, the effort level of each worker, and the span of control of supervisors. I then use the theory to explain two empirical findings established in the literature. First, a common improvement in this type of management technology across all firms intensifies competition in the monopolistically competitive sector. As a result, the smallest firms are forced to leave the market; the most efficient firms thrive; the average firm size increases. Second, firms are less decentralized in economies with ineffective management technology. In an extended two-country model incorporating international trade, I show that firms facing increasing import competition flatten their hierarchies and use more incentive-based pay. Further-more, I find that countries with superior management technology experience larger welfare gains from opening up to trade and have larger trade shares. |
Description | Session 122: Management Matters |
Persistent Identifier | http://hdl.handle.net/10722/210661 |
DC Field | Value | Language |
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dc.contributor.author | Chen, C | - |
dc.date.accessioned | 2015-06-23T04:43:52Z | - |
dc.date.available | 2015-06-23T04:43:52Z | - |
dc.date.issued | 2014 | - |
dc.identifier.citation | The 2015 Annual Conference of the Society for Economic Dynamics (SED 2015), Warsaw, Poland, 25-27 June 2015. | - |
dc.identifier.uri | http://hdl.handle.net/10722/210661 | - |
dc.description | Session 122: Management Matters | - |
dc.description.abstract | The quality of management technology that is used to monitor and incentivize workers varies substantially across countries. To understand the impact of this on economic activities, I develop a two-sector model in which firms facing heterogeneous demands set up hierarchies to manage the production processes in a monopolistically competitive sector. Entrepreneurs decide the number of hierarchical layers, the effort level of each worker, and the span of control of supervisors. I then use the theory to explain two empirical findings established in the literature. First, a common improvement in this type of management technology across all firms intensifies competition in the monopolistically competitive sector. As a result, the smallest firms are forced to leave the market; the most efficient firms thrive; the average firm size increases. Second, firms are less decentralized in economies with ineffective management technology. In an extended two-country model incorporating international trade, I show that firms facing increasing import competition flatten their hierarchies and use more incentive-based pay. Further-more, I find that countries with superior management technology experience larger welfare gains from opening up to trade and have larger trade shares. | - |
dc.language | eng | - |
dc.publisher | Society for Economic Dynamics Annual Meeting, SED 2015. The Conference program's website is located at http://editorialexpress.com/conference/SED2015/program/SED2015.html | - |
dc.relation.ispartof | Society for Economic Dynamics Annual Meeting, SED 2015 | - |
dc.subject | Management | - |
dc.subject | Firm organization and productivity | - |
dc.subject | Trade liberalization | - |
dc.subject | Institutions and development | - |
dc.title | Management Quality, Firm Organization and International Trade | - |
dc.type | Conference_Paper | - |
dc.identifier.email | Chen, C: ccfour@hku.hk | - |
dc.identifier.authority | Chen, C=rp01944 | - |
dc.description.nature | postprint | - |
dc.identifier.hkuros | 244059 | - |
dc.publisher.place | Warsaw, Poland | - |