Subcontracting has become a prominent business practice across many industries. Subcontracting of industrial production is generally based on short-term need for additional processing capacity, and is oftentimes employed by manufacturers to process customer orders more quickly than using only...

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 U.S. firms (1986-1999) and a quasi-natural experiment (trade liberalization), we find that competition leads firms...

This paper establishes a causal effect of competition from trade liberalization on various characteristics of organizational design. We exploit a unique panel dataset on firm hierarchies (1986-1999) of large U.S. firms and find that increasing competition leads firms to become flatter, i.e., (i)...