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An Analysis of Divisional Investment Policies
Shin, Hyun-Han - 2008
This paper investigates the divisional investment policies of diversified firms. We find that investment of the smallest division of diversified firms is significantly related to the cash flow of the other segments. We then show that the smallest division's investment is more sensitive to the...
Persistent link: https://www.econbiz.de/10012774975
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The Cost of Diversity : The Diversification Discount and Inefficient Investment
Rajan, Raghuram G. - 2006
In a simple model of capital budgeting in a diversified firm where headquarters has limited power, we show that funds are allocated towards the most inefficient divisions. The distortion is greater the more diverse are the investment opportunities of the firm's divisions. We test these...
Persistent link: https://www.econbiz.de/10012783969
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Organizational Complexity and Balance Sheet Management in Global Banks
Cetorelli, Nicola - 2016
Banks have progressively evolved from being standalone institutions to being subsidiaries of increasingly complex financial conglomerates. We conjecture and provide evidence that the organizational complexity of the family of a bank is a fundamental driver of the business model of the bank...
Persistent link: https://www.econbiz.de/10012994377
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Incentives, Information, and Organizational Design
Stiglitz, Joseph E. - 2021
This paper explores the interaction between incentives, information, and organizational design. It argues that the virtues of the market economy do not lie so much in the vision of competition and decentralization embodied in the Arrow-Debreu model, or the Lange-Lerner-Taylor analysis of market...
Persistent link: https://www.econbiz.de/10013215336
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Organization and Inequality in a Knowledge Economy
Garicano, Luis; Rossi-Hansberg, Esteban - 2021
We present a theory of the organization of work in an economy where knowledge is an essential input in production: a … may produce on their own or in organizations. Our theory generates an assignment of workers to positions, a wage structure … referral markets. We use our theory to study the impact of information and communication technology, and contrast its …
Persistent link: https://www.econbiz.de/10013231868
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From Sectoral to Functional Urban Specialization
Duranton, Gilles; Puga, Diego - 2021
Striking evidence is presented of a previously unremarked transformation of urban structure from mainly sectoral to mainly functional specialization. We offer an explanation showing that this transformation is inextricably interrelated with changes in firms' organization. A greater variety of...
Persistent link: https://www.econbiz.de/10013313317
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An Empirical Framework for Testing Theories About Complimentarity in Organizational Design
Athey, Susan; Stern, Scott - 2022
This paper studies alternative empirical strategies for estimating the effects of organization design practices on performance, as well as the factors which determine organizational design, in a cross-section of firms. Our economic model is based on a firm where multiple organizational design...
Persistent link: https://www.econbiz.de/10013308469
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Urban Specialisation; from Sectoral to Functional
Gervais, Antoine; Markusen, James R.; Venables, Anthony J. - 2022
costs fall, both our theory and empirical analysis show that sector concentration and regional specialization fall for …
Persistent link: https://www.econbiz.de/10014265009
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Layoffs, Lemons and Temps
House, Christopher L. - 2012
We develop a dynamic equilibrium model of labor demand with adverse selection. Firms learn the quality of newly hired workers after a period of employment. Adverse selection makes it costly to hire new workers and to release productive workers. As a result, firms hoard labor and under-react to...
Persistent link: https://www.econbiz.de/10013108250
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The Economics of Fraudulent Accounting
Kedia, Simi - 2010
We argue that earnings management and fraudulent accounting have important economic consequences. In a model where the costs of earnings management are endogenous, we show that in equilibrium, bad managers hire and invest too much in order to pool with the good managers. This behavior distorts...
Persistent link: https://www.econbiz.de/10012762395