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Technological innovations and the allocation of decision-making authorities in Swiss firms

Author

Listed:
  • Beckmann, Michael

    (University of Basel)

  • Armbruster, Kathrin

    (University of Basel)

Abstract

Since several decades, information and communication technologies (ICT) as well as new organizational designs change the working life in firms. Using nationally representative Swiss firm-level panel data, the present paper analyzes the relationship between these developments and examines, whether ICT is associated with centralization or decentralization tendencies. The results suggest a positive impact of ICT on the degree of delegation. Furthermore, the diffusion of ICT use within the workforce and the intensity of ICT investments are essential for the decentralization effect of ICT. Thus, reduced agency costs owing to ICT use result in decentralized decision-making authorities in Swiss firms. The results are robust to potential endogeneity biases like reversed causality and unobserved firm characteristics.

Suggested Citation

  • Beckmann, Michael & Armbruster, Kathrin, 2011. "Technological innovations and the allocation of decision-making authorities in Swiss firms," Working papers 2011/04, Faculty of Business and Economics - University of Basel.
    • Handle: RePEc:bsl:wpaper:2011/04
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    File URL: https://edoc.unibas.ch/26672/1/Paper_D-135Armbruster.pdf
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    References listed on IDEAS

    as
    1. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
    2. Daron Acemoglu & Philippe Aghion & Claire Lelarge & John Van Reenen & Fabrizio Zilibotti, 2007. "Technology, Information, and the Decentralization of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1759-1799.
    3. Massimo G. Colombo & Marco Delmastro, 2004. "Delegation of Authority In Business Organizations: An Empirical Test," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 53-80, March.
    4. Sun, Hongyi & Gertsen, Frank, 1995. "Organizational changes related to advanced manufacturing technology in the production area," International Journal of Production Economics, Elsevier, vol. 41(1-3), pages 369-375, October.
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    More about this item

    Keywords

    ICT; decision-making authority; decentralization; Mundlaks approach;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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