The Anatomy of French Production Hierarchies

Esteban Rossi-Hansberg, Lorenzo Caliendo and Ferdinando Monte

No 9073, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We use a comprehensive dataset of French manufacturing firms to study their internal organization. We first divide the employees of each firm into `layers' using occupational categories. Layers are hierarchical in that the typical worker in a higher layer earns more, and the typical firm occupies less of them. In addition, the probability of adding (dropping) a layer is very positively (negatively) correlated with value added. We then explore the changes in the wages and number of employees that accompany expansions in layers, output, or markets (by becoming exporters). The empirical results indicate that reorganization, through changes in layers, is key to understand how firms expand and contract. For example, we find that firms that expand substantially add layers and pay lower average wages in all pre-existing layers. In contrast, firms that expand little and do not reorganize pay higher average wages in all pre-existing layers.

Keywords: Firm dynamics; Firm growth; Organizational change; Organizations; Skills; Wages (search for similar items in EconPapers)
JEL-codes: D22 F16 J24 J31 (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-bec, nep-hme, nep-hrm and nep-lab
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Citations: View citations in EconPapers (29)

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Journal Article: The Anatomy of French Production Hierarchies (2015)
Working Paper: The Anatomy of French Production Hierarchies (2012)
Working Paper: The Anatomy of French Production Hierarchies (2012)
Working Paper: The Anatomy of French Production Hierarchies (2012)
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