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Reallocation of Capital and Labor within Firms

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  • Holger Mueller

    (New York University Leonard N. Stern School of Business)

Abstract

Summary Understanding how internal capital and labor markets function sheds light on one of the most fundamental questions in economics: what determines the boundaries of the firm? This essay reviews the theoretical and empirical literature on internal capital markets and firm boundaries, focusing in particular on the close link between the two subjects Emphasis is placed on the question of how firms reallocate capital and labor internally across individual firm units in response to plausibly exogenous shocks The essay concludes with directions for future research.

Suggested Citation

  • Holger Mueller, 2016. "Reallocation of Capital and Labor within Firms," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 152(4), pages 289-303, October.
  • Handle: RePEc:spr:sjecst:v:152:y:2016:i:4:d:10.1007_bf03399429
    DOI: 10.1007/BF03399429
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    References listed on IDEAS

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    Cited by:

    1. Doerr, Sebastian & Marin, Dalia & Suverato, Davide & Verdier, Thierry, 2020. "Mis-allocation Within Firms: Internal Finance and International Trade," CEPR Discussion Papers 14478, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    D23; G31; G32;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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