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Globalisation and the Market for Team-Mates


  • Lazear, Edward P


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.

Suggested Citation

  • Lazear, Edward P, 1999. "Globalisation and the Market for Team-Mates," Economic Journal, Royal Economic Society, vol. 109(454), pages 15-40, March.
  • Handle: RePEc:ecj:econjl:v:109:y:1999:i:454:p:c15-40

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    References listed on IDEAS

    1. 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 1141-1187, December.
    2. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    3. Kole, S.R. & MacDonald, G.M., 1997. "Economics, Demography and Communication," Papers 97-06, Rochester, Business - Financial Research and Policy Studies.
    4. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    5. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
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