Firm Export Diversification and Change in Workforce Composition

Sarah Guillou, Tania Treibich

Research output: Working paperProfessional

350 Downloads (Pure)

Abstract

The objective of this paper is to show that part of the fixed cost of firms' trade expansion is due to the acquisition of new internal capabilities (e.g. technology, production processes or skills), which imply a costly change in the firm's internal labor organisation. We investigate the relationship between a firm's structure of labor, in terms of relative number of managers, and the scope of its export portfolio, in terms of product-destination varieties. The empirical analysis is based on a matched employer-employee dataset covering the population of French firms from tradable sectors over the period 2009-2014. Our analysis suggests that market expansion, and in particular export diversification, is associated with a change in the firm's workforce composition, namely an increase in the number of managerial layers and in the ratio of managers.
We show how these results are consistent with a simple model where the complexity of a firm's operations increases in the number of product-destination couples exported, and where managers' role is to address the unsolved problems arising from such increased complexity of operations.
Original languageEnglish
PublisherMaastricht University, Graduate School of Business and Economics
DOIs
Publication statusPublished - 31 Oct 2017

Publication series

SeriesGSBE Research Memoranda
Number026

JEL classifications

  • f16 - Trade and Labor Market Interactions
  • e24 - "Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital"
  • c14 - Semiparametric and Nonparametric Methods: General
  • d22 - Firm Behavior: Empirical Analysis

Cite this