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Dynamics of productivity and cost of labor in Italian Manufacturing firms

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  • G. Bottazzi
  • M. Grazzi

Abstract

This paper studies the impact of size on labor cost and productivity for Italian manufacturing firms. The distributions of both labor cost and productivity display a wide support, even when disaggregated by sector of industrial activity. Further, both labor cost and productivity, when considered alone, are growing with the size of the firm. We investigate this relationship on a new set of data and we are able to show that once accounted for productivity differences among firms, size still retains a positive effect on cost of labor in most of the sectors considered.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp865.

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Date of creation: Feb 2013
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Handle: RePEc:bol:bodewp:wp865

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  1. Giulio Bottazzi & Marco Grazzi, 2010. "Wage--size relation and the structure of work-force composition in Italian manufacturing firms," Cambridge Journal of Economics, Oxford University Press, vol. 34(4), pages 649-669.
  2. repec:hal:cesptp:hal-00642699 is not listed on IDEAS
  3. Arai, Mahmood, 1999. "Wages, Profits and Capital Intensity: Evidence from Matched Worker-Firm Data," Research Papers in Economics 1999:3, Stockholm University, Department of Economics.
  4. Thierry Lallemand & Robert Plasman & François Rycx, 2007. "The establishment-size wage premium: evidence from European countries," ULB Institutional Repository 2013/8735, ULB -- Universite Libre de Bruxelles.
  5. Giulia Faggio & Kjell G. Salvanes & John Van Reenen, 2007. "The evolution of inequality in productivity and wages: panel data evidence," LSE Research Online Documents on Economics 4558, London School of Economics and Political Science, LSE Library.
  6. Lucia Foster & John Haltiwanger & C.J. Krizan, 1998. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Working Papers 6803, National Bureau of Economic Research, Inc.
  7. Giulio Bottazzi & Marco Grazzi & Angelo Secchi, 2004. "Characterizing the Production Process: A Disaggregated Analysis of Italian Manufacturing Firms," LEM Papers Series 2004/24, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  8. Giulio Bottazzi & Marco Grazzi & Angelo Secchi & Federico Tamagni, 2009. "Financial and economic determinants of firm default," LEM Papers Series 2009/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  9. Alexander Muravyev, 2009. "Employer Size, Wages And Unobserved Skills: Evidence From Moonlighters In The Uk," Manchester School, University of Manchester, vol. 77(6), pages 651-674, December.
  10. Giulio Bottazzi & Marco Grazzi & Angelo Secchi & Federico Tamagni, 2007. "Assessing the Impact of Credit Ratings and Economic Performance on Firm Default," LEM Papers Series 2007/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  11. Delmastro, Marco, 2002. "The determinants of the management hierarchy: evidence from Italian plants," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 119-137, January.
  12. Irving B. Kravis & Robert E. Lipsey, 1980. "The Location of Overseas Production and Production for Export by U.S. Multinational Firms," NBER Working Papers 0482, National Bureau of Economic Research, Inc.
  13. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
  14. Zabojnik, Jan & Bernhardt, Dan, 2001. "Corporate Tournaments, Human Capital Acquisition, and the Firm Size-Wage Relation," Review of Economic Studies, Wiley Blackwell, vol. 68(3), pages 693-716, July.
  15. Meagher, Kieron J. & Wilson, Hugh, 2004. "Different firm size effects on wages for supervisors and workers," Economics Letters, Elsevier, vol. 84(2), pages 225-230, August.
  16. Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, vol. 75, pages 123.
  17. Giulio Bottazzi & Giovanni Dosi & Nadia Jacoby & Angelo Secchi & Federico Tamagni, 2010. "Corporate performances and market selection: some comparative evidence," Industrial and Corporate Change, Oxford University Press, vol. 19(6), pages 1953-1996, December.
  18. Giovanni Dosi & Marco Grazzi, 2006. "Technologies as problem-solving procedures and technologies as input--output relations: some perspectives on the theory of production," Industrial and Corporate Change, Oxford University Press, vol. 15(1), pages 173-202, February.
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