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Globalisation and the Market for Team-Mates

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  • Lazear, Edward P

Abstract

The globalization of firms is explored at theoretical and empirical levels. The idea is that a global firm is a multicultural team. The existence of a global firm is somewhat puzzling. Combining workers who have different cultures, legal systems, and languages imposes costs on the firm that would not be present were all workers to conform to one standard. In order to offset the costs of cross-cultural dealing, there must be complementarities between the workers that are sufficiently important to overcome the costs. The search for the best practice is analyzed and empirical support from an examination of trading patterns is provided.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 109 (1999)
Issue (Month): 454 (March)
Pages: C15-40

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Handle: RePEc:ecj:econjl:v:109:y:1999:i:454:p:c15-40

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  1. James E. Rauch, 1996. "Networks versus Markets in International Trade," NBER Working Papers 5617, National Bureau of Economic Research, Inc.
  2. Kole, S.R. & MacDonald, G.M., 1997. "Economics, Demography and Communication," Papers 97-06, Rochester, Business - Financial Research and Policy Studies.
  3. Bengt Holmstrom, 1981. "Moral Hazard in Teams," Discussion Papers 471, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. James E. Rauch & Vitor Trindade, 1999. "Ethnic Chinese Networks in International Trade," NBER Working Papers 7189, National Bureau of Economic Research, Inc.
  5. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December.
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