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Routine Work, Firm Boundaries, and the Rise of Local Supplier Entry

Author

Listed:
  • Duha T. Altindag
  • Nabamita Dutta
  • John M. Nunley
  • R. Alan Seals
  • Adam Stivers

Abstract

Between 2005 and 2019, U.S. business applications rose 40 percent while conversion to employer firms fell by nearly half. We study whether boundary redrawing helps explain this pattern. Structured routine-cognitive work can be governed through deliverables and thinner buyer and supplier interfaces. When such work remains place-bound, outsourcing creates demand for domestic specialist suppliers. Across 722 commuting zones, a one percentage-point higher baseline routine employment share raises applications by 27.8 per 100,000 residents. Realized entry concentrates in micro-establishments, with no startup quality gains. Contract and industry evidence point to local supplier entry, not routine-manual displacement.

Suggested Citation

  • Duha T. Altindag & Nabamita Dutta & John M. Nunley & R. Alan Seals & Adam Stivers, 2026. "Routine Work, Firm Boundaries, and the Rise of Local Supplier Entry," Papers 2604.19987, arXiv.org.
    • Handle: RePEc:arx:papers:2604.19987
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    File URL: http://arxiv.org/pdf/2604.19987
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