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Not in my Community: Social Pressure and the Geography of Dismissals


  • Eve Caroli

    () (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris-Dauphine, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Giorgio Brunello

    (Dipartimento di Economia "Marco Fanno" - Universita degli Studi di Padova = University of Padua = Université de Padoue, dipartimento di scienze economiche - Universita degli Studi di Padova = University of Padua = Université de Padoue)

  • Andrea Bassanini

    (OECD - OECD, OCDE - Organisation de coopération et de développement économiques - Organisation de Coopération et de Développement Economiques)


We investigate the impact of local social pressure on firms' firing decisions. Using linked employer-employee data, we show that secondary establishments located further away from headquarters have higher dismissal rates than those located closer. The effect of distance on dismissals is stronger, the greater the visibility of the firm in the local community of its headquarters and the larger the degree of selfishness of that community. We show that these findings can be explained by the social pressure exerted by the communities where firms' headquarters are located, which induces CEOs to refrain from dismissing at short distance from their headquarters.

Suggested Citation

  • Eve Caroli & Giorgio Brunello & Andrea Bassanini, 2017. "Not in my Community: Social Pressure and the Geography of Dismissals," Post-Print hal-01347254, HAL.
  • Handle: RePEc:hal:journl:hal-01347254
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    Cited by:

    1. Boeri, Tito & Jimeno, Juan Francisco, 2015. "The unbearable divergence of unemployment in Europe," LSE Research Online Documents on Economics 65001, London School of Economics and Political Science, LSE Library.
    2. P. Charnoz & C. Lelarge & C. Trevien, 2017. "Communication Costs and the Internal Organization of Multi-Plant Businesses: Evidence from the Impact of the French High-Speed Rail," Working papers 635, Banque de France.
    3. Boeri, Tito & Jimeno, Juan F., 2016. "Learning from the Great Divergence in unemployment in Europe during the crisis," Labour Economics, Elsevier, vol. 41(C), pages 32-46.

    More about this item


    Dismissals; social pressure;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)


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