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Productivity and Organization in Portuguese Firms

Author

Listed:
  • Lorenzo Caliendo
  • Giordano Mion
  • Luca David Opromolla
  • Esteban Rossi-Hansberg

Abstract

The productivity of firms is, at least partly, determined by a firm’s actions and decisions. One of these decisions involves the organization of production in terms of the number of layers of management the firm decides to employ. Using detailed employer-employee matched data and firm production quantity and input data for Portuguese firms, we study the endogenous response of revenue-based and quantity-based productivity to a change in layers: a firm reorganization. We show that as a result of an exogenous demand or productivity shock that makes the firm reorganize and add a management layer, quantity-based productivity increases by about 8%, while revenue-based productivity drops by around 7%. Such a reorganization makes the firm more productive, but also increases the quantity produced to an extent that lowers the price charged by the firm and, as a result, its revenue-based productivity.

Suggested Citation

  • Lorenzo Caliendo & Giordano Mion & Luca David Opromolla & Esteban Rossi-Hansberg, 2015. "Productivity and Organization in Portuguese Firms," CESifo Working Paper Series 5678, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5678
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:inecon:v:111:y:2018:i:c:p:1-20 is not listed on IDEAS
    2. Bastos, Paulo & Monteiro, Natália P. & Straume, Odd Rune, 2018. "Foreign acquisition and internal organization," Journal of International Economics, Elsevier, vol. 114(C), pages 143-163.
    3. Giacinta Cestone & Chiara Fumagalli & Francis Kramaz & Giovanni Pica, 2015. "Insurance Between Firms: The Role of Internal Labor Markets," CSEF Working Papers 386, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 15 Feb 2017.
    4. Caliendo, Lorenzo & Monte, Ferdinando & Rossi-Hansberg, Esteban, 2017. "Exporting and Organizational Change," CEPR Discussion Papers 12177, C.E.P.R. Discussion Papers.
    5. Barbosa, Luciana & Bilan, Andrada & Célérier, Claire, 2019. "Credit supply and human capital: evidence from bank pension liabilities," Working Paper Series 2271, European Central Bank.
    6. Amaia Iza, 2016. "Entrepreneurial skills, technological progress and firm growth," EcoMod2016 9469, EcoMod.
    7. Stephan Kyburz, Huong Quynh Nguyen, 2017. "Does Proximity to Foreign Invested Firms Stimulate Productivity Growth of Domestic Firms? Firmlevel Evidence from Vietnam," Diskussionsschriften credresearchpaper16, Universitaet Bern, Departement Volkswirtschaft - CRED.
    8. di Mauro, Filippo & Mion, Giordano & Stöhlker, Daniel, 2017. "The drivers of revenue productivity: a new decomposition analysis with firm-level data," Working Paper Series 2014, European Central Bank.
    9. repec:sls:ipmsls:v:32:y:2017:4 is not listed on IDEAS
    10. Nguyen, Huong, 2016. "Does Proximity to Foreign Invested Firms Stimulate Productivity Growth of Domestic Firms? Firm-level Evidence from Vietnam," Papers 1001, World Trade Institute.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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