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Knowledge-based Hierarchies: Using Organizations to Understand the Economy

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  • Luis Garicano
  • Esteban Rossi-Hansberg

Abstract

We argue that incorporating the decision of how to organize the acquisition, use, and communication of knowledge into economic models is essential to understand a wide variety of economic phenomena. We survey the literature that has used knowledge-based hierarchies to study issues like the evolution of wage inequality, the growth and productivity of firms, economic development, the gains from international trade, as well as offshoring and the formation of international production teams, among many others. We also review the nascent empirical literature that has, so far, confirmed the importance of organizational decisions and many of its more salient implications.

Suggested Citation

  • Luis Garicano & Esteban Rossi-Hansberg, 2014. "Knowledge-based Hierarchies: Using Organizations to Understand the Economy," NBER Working Papers 20607, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20607
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    References listed on IDEAS

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    Cited by:

    1. Lorenzo Caliendo & Giordano Mion & Luca David Opromolla & Esteban Rossi-Hansberg, 2015. "Productivity and Organization in Portuguese Firms," CEP Discussion Papers dp1397, Centre for Economic Performance, LSE.
    2. repec:oup:qjecon:v:132:y:2017:i:1:p:211-270. is not listed on IDEAS
    3. Fabiano Schivardi & Claudio Michelacci, 2016. "Are They All Like Bill, Mark, and Steve? The Education Premium for Entrepreneurs," 2016 Meeting Papers 1163, Society for Economic Dynamics.
    4. repec:kap:iecepo:v:14:y:2017:i:2:d:10.1007_s10368-016-0371-1 is not listed on IDEAS
    5. Florian Scheuer & Iván Werning, 2017. "The Taxation of Superstars," The Quarterly Journal of Economics, Oxford University Press, vol. 132(1), pages 211-270.
    6. Toshitaka Gokan & Sergey Kichko & Jacques-François Thisse, 2018. "How Do Trade and Communication Costs Shape the Spatial Organization Of Firms?," HSE Working papers WP BRP 191/EC/2018, National Research University Higher School of Economics.
    7. repec:eee:inecon:v:114:y:2018:i:c:p:143-163 is not listed on IDEAS
    8. Amaia Iza, 2016. "Entrepreneurial skills, technological progress and firm growth," EcoMod2016 9469, EcoMod.
    9. Emanuele Brancati & Raffaele Brancati & Dario Guarascio & Andrea Maresca & Manuel Romagnoli & Antonello Zanfei, 2018. "Firm-level Drivers of Export Performance and External Competitiveness in Italy," European Economy - Discussion Papers 2015 - 087, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    10. Legge, Stefan, 2016. "Innovation in an Aging Population," Annual Conference 2016 (Augsburg): Demographic Change 145590, Verein für Socialpolitik / German Economic Association.
    11. Gries, T. & Grundmann, R. & Palnau, I. & Redlin, M., 2015. "Does technological change drive inclusive industrialization? : A review of major concepts and findings," MERIT Working Papers 044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. 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.
    13. Paul Gaggl & Greg C. Wright, 2017. "A Short-Run View of What Computers Do: Evidence from a UK Tax Incentive," American Economic Journal: Applied Economics, American Economic Association, vol. 9(3), pages 262-294, July.
    14. Gumpert, Anna, 2017. "The Organization of Knowledge in Multinational Firms," Rationality and Competition Discussion Paper Series 29, CRC TRR 190 Rationality and Competition.
    15. Ehrich, Malte & Hess, Sebastian, 2015. "The Ability Of Organisations To Adopt Foreign Trade Standards," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 209202, German Association of Agricultural Economists (GEWISOLA).
    16. Jean-Paul Chavas & Kwansoo Kim, 2016. "On the Microeconomics of Specialization: the Role of Non-Convexity," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 44(3), pages 387-403, September.
    17. Ildikó Magyari, 2017. "Firm Reorganization, Chinese Imports, and US Manufacturing Employment," Working Papers 17-58, Center for Economic Studies, U.S. Census Bureau.
    18. Anna Gumpert & Henrike Steimer & Manfred Antoni, 2018. "Firm Organization with Multiple Establishments," CESifo Working Paper Series 7435, CESifo Group Munich.

    More about this item

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F6 - International Economics - - Economic Impacts of Globalization
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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