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Hierarchical Structure in Brazilian Industrial Firms: an Econometric Study

  • Luis Otávio Façanha
  • Marcelo Resende

The paper investigates different implications of theoretical models for hierarchical structure. A sample of 6567 firms in the Brazilian manufacturing industry is considered and explanatory factors pertaining structural characteristics, network technology, technological innovations, managerial innovations and incentive mechanisms are investigated. Despite the broader availability of explanatory variables in some categories, one only detects important joint effects accruing from the group of network technology variables as had been previously obtained in the related literature. In contrast, however, one can detect a marginally significant joint effect of the newly considered group of incentive mechanisms variables. The evidence in terms of individual effects is largely consistent with the predicted effects from the theoretical literature on hierarchy.

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Paper provided by European University Institute in its series Economics Working Papers with number ECO2006/1.

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Date of creation: 2006
Date of revision:
Handle: RePEc:eui:euiwps:eco2006/1
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  1. McAfee, R. Preston & McMillan, John., 1990. "Organizational Diseconomies of Scale," Working Papers 728, California Institute of Technology, Division of the Humanities and Social Sciences.
  2. Oliver Hart & John Moore, 1999. "On the design of hierarchies: coordination versus specialization," LSE Research Online Documents on Economics 19340, London School of Economics and Political Science, LSE Library.
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  8. Lindbeck, Assar & Snower, Dennis J, 2000. "Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 353-76, July.
  9. repec:ebl:ecbull:v:12:y:2002:i:2:p:1-13 is not listed on IDEAS
  10. Marco Delmastro, 2002. "On the choice of incentives in firms: influence activity, monitoring technology and organizational structure," Economics Bulletin, AccessEcon, vol. 12(2), pages 1-13.
  11. Gurmu, Shiferaw & Trivedi, Pravin K., 1992. "Overdispersion tests for truncated Poisson regression models," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 347-370.
  12. Bolton, Patrick & Dewatripont, Mathias, 1994. "The Firm as a Communication Network," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 809-39, November.
  13. Raghuram G. Rajan & Julie Wulf, 2006. "The Flattening Firm: Evidence from Panel Data on the Changing Nature of Corporate Hierarchies," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 759-773, November.
  14. repec:ebl:ecbull:v:12:y:2005:i:13:p:1-7 is not listed on IDEAS
  15. Kam Ki Tang & Rodney Beard & Evelyn Ng & Leopoldo Yanes, 2005. "The hierarchical structure of a firm: a geometric approach," Economics Bulletin, AccessEcon, vol. 12(13), pages 1-7.
  16. Kam Ki Tang & Leopoldo Yanes, 2009. "The hierarchical structure of the firm: a geometric perspective," Prague Economic Papers, University of Economics, Prague, vol. 2009(2), pages 156-175.
  17. Holmstrom, Bengt & Milgrom, Paul, 1994. "The Firm as an Incentive System," American Economic Review, American Economic Association, vol. 84(4), pages 972-91, September.
  18. Gurmu, Shiferaw, 1991. "Tests for Detecting Overdispersion in the Positive Poisson Regression Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(2), pages 215-22, April.
  19. Qian, Yingyi, 1994. "Incentives and Loss of Control in an Optimal Hierarchy," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 527-44, July.
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