We construct a dynamic assignment model that explains persistent productivity differences between firms. Large expected organization capital (firm-specific knowledge) attracts skilled workers, who help to accumulate organization capital. Accumulated large organization capital leads to good...

Is the paradise of effortless communication the ideal environment for knowledge creation? Or, can the development of local culture in regions raise knowledge productivity compared to a single region with a unitary culture? In other words, can a real technological increase in the cost of...