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Project Citation: 

Guadalupe, Maria, and Wulf, Julie. Replication data for: The Flattening Firm and Product Market Competition: The Effect of Trade Liberalization on Corporate Hierarchies. Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113762V1

Project Description

Summary:  View help for Summary This paper establishes a causal effect of product market competition on various characteristics of organizational design. Using a unique panel dataset on firm hierarchies of large US firms (1986-1999) and a quasi-natural experiment (trade liberalization), we find that competition leads firms to flatten their hierarchies: firms reduce the number of positions between the CEO and division managers, and firms increase the number of positions reporting directly to the CEO. The results illustrate how firms redesign their organizational structure through a set of complementary choices in response to changes in their environment. We discuss several possible interpretations of these changes. (JEL D23, F13, G34, M12, M51)

Scope of Project

JEL Classification:  View help for JEL Classification
      D23 Organizational Behavior; Transaction Costs; Property Rights
      F13 Trade Policy; International Trade Organizations
      G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
      M12 Personnel Management; Executives; Executive Compensation
      M51 Personnel Economics: Firm Employment Decisions; Promotions


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