After many years of large drops in the cost information and communicationtechnology, the evidence on its impact on productivity growth in non-IT produc-ing sectors continues to be mixed.We propose a framework to study the impactof information and communication technology on growth through its...

Why do firms decide to offshore certain parts of their production process? Whatqualifies certain countries as particularly attractive locations to offshore? In thispaper we address these questions with a theory of international production hierarchiesin which organizations arise endogenously to...

We present an equilibrium theory of the organization of work in an economywhere knowledge is an essential input in production and agents are heterogeneousin skill. Agents organize production by matching with others in knowledgehierarchies designed to use and communicate their knowledge...

The knowledge economy is nothing new. As Chandler’s (1977) classic study documents,improvements in communication technology (e.g. mail via railways, thetelegraph, and later the telephone) played a key role in the emergence of the modernAmerican corporation in the late 19th century and the...

How does the formation of cross-country teams affect the organization of workand the structure of wages? To study this question, we propose a theory of theassignment of heterogeneous agents into hierarchical teams, where less skilledagents specialize in production and more skilled agents...

Since the seminal work of Katz and Murphy (1992), the study of wage inequalityhas taken as its starting point a neoclassical CES production function using as inputscapital and low and high skill labor. This approach assumes that the organization ofproduction is fixed and determined by a...

In this paper we use insights from organizational economics and financialregulation to study the optimal architecture of supervision. We suggest that thenew architecture should revolve around the following principles: (i) banking,securities and insurance supervision should be further integrated;...

Large companies are usually organized into business units, yet some activitiesare almost always centralized in a company-wide functional unit. We firstshow that organizations endogenously create an incentive conflict between functionalmanagers (who desire excessive standardization) and...

When should expertise be shared in markets and when in …firms? Knowl-edge exchanges in the market involve less information about the quality ofthe provider's expertise, but facilitate good utilization of experts knowledge.In a …rm, management holds soft information about individuals...

Changes in information and communication technologieshave increased the offshorability of tasks.As routine tasks (Pol Antràs, Luis Garicano and EstebanRossi-Hansberg, 2006) and lower offshoring-costtasks (Gene Grossman and Esteban Rossi-Hansberg,2008) move abroad, production processes become...