Productivity and organization in Portuguese firms

Lorenzo Caliendo, Giordano Mion, Luca David Opromolla and Esteban Rossi-Hansberg

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: Productivity; organization; wages; managers; layers; TFP; firm size (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2015-12
New Economics Papers: this item is included in nep-cse, nep-eff and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://eprints.lse.ac.uk/66062/ Open access version. (application/pdf)

Related works:
Journal Article: Productivity and Organization in Portuguese Firms (2020)
Working Paper: Productivity and Organization in Portuguese Firms (2019)
Working Paper: Productivity and Organization in Portuguese Firms (2016)
Working Paper: Productivity and Organization in Portuguese Firms (2015)
Working Paper: Productivity and Organization in Portuguese Firms (2015)
Working Paper: Productivity and Organization in Portuguese Firms (2015)
Working Paper: Productivity and Organization in Portuguese Firms (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:66062

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