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The Life Cycle of Businesses and Their Internal Organization

Author

Listed:
  • Elizabeth Weber Handwerker
  • Sara Moreira
  • David Piccone Jr.

Abstract

We document new stylized facts on the occupational mix of businesses in the United States and how their internal organization evolves over their life cycles. Our main empirical finding is that younger businesses have fewer hierarchical layers and lower span of control than comparable older businesses do. Our results suggest that businesses become simultaneously more hierarchical and increase their managerial span of control over their life cycles. We show that this pattern is not entirely driven by selection or differences in size and is pervasive across cohorts and sectors.

Suggested Citation

  • Elizabeth Weber Handwerker & Sara Moreira & David Piccone Jr., 2021. "The Life Cycle of Businesses and Their Internal Organization," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 587-592, May.
    • Handle: RePEc:aea:apandp:v:111:y:2021:p:587-92
    DOI: 10.1257/pandp.20211121
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    More about this item

    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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