Article | American Economic Review: Papers and Proceedings | May 2010

Does Product Market Competition Lead Firms to Decentralize?

by Nicholas Bloom, Raffaella Sadun and John Van Reenen

Abstract

There is a widespread sense that over the last two decades firms have been decentralizing decisions to employees further down the managerial hierarchy. Economists have developed a range of theories to account for delegation, but there is less empirical evidence, especially across countries. This has limited the ability to understand the phenomenon of decentralization. To address the empirical lacuna, we have developed a research program to measure the internal organization of firms-including their decentralization decisions-across a large range of industries and countries.

Keywords: Product; Markets; Competition; Business Ventures; Geographic Location; Employees; Research; Programs; Decisions;

Citation:

Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. "Does Product Market Competition Lead Firms to Decentralize?" American Economic Review: Papers and Proceedings 100, no. 2 (May 2010): 434–438.