The Experts below are selected from a list of 195 Experts worldwide ranked by ideXlab platform
Wen Wang - One of the best experts on this subject based on the ideXlab platform.
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Firm Organization and market structure centralization vs decentralization
Organizational Economics Proceedings, 2014Co-Authors: Kieron Meagher, Wen WangAbstract:The protability of a rm is jointly determined by it's Organizational structure and the market structure. To explore the eects of market factors on optimal Organizational structure we develop a real-time information processing model of a multi unit rm in a dynamic duopoly environment. Our model is the rst to match with recent empirical nding We nd decentralization dominates for products with short lifecycles but in general there is no unique optimal Organization structure over time - when product market competition is intense, decentralization outperforms centralization in the initial phase of the product lifecycle, centralization is superior in the intermediate phase, and decentralization outperforms again at the nal phase. Thus Organizational change also appears to be a natural part of the lifecycle as well as a response to economic shocks. Moreover, we also nd that the performance of decentralization is superior when: (i) consumer tastes are more homogenous; (ii) consumers are more sensitive to store practices; and (iii) a larger number of markets are served.
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Firm Organization and market structure centralization vs decentralization
Social Science Research Network, 2009Co-Authors: Kieron Meagher, Wen WangAbstract:The profitability of a Firm is jointly determined by it's Organizational structure and the market structure. To explore the effects of market factors on optimal Organizational structure we develop a real-time information processing model of a multi unit Firm in a dynamic duopoly environment. Our model is the first to match with recent empirical findings (Mendelson 2000, Delmastro 2002, Acemoglu et al. 2007). We find decentralization dominates for products with short lifecycles but in general there is no unique optimal Organization structure over time - when product market competition is intense, decentralization outperforms centralization in the initial phase of the product lifecycle, centralization is superior in the intermediate phase, and decentralization outperforms again at the final phase. Thus Organizational change also appears to be a natural part of the lifecycle as well as a response to economic shocks. Moreover, we also find that the performance of decentralization is superior when: (i) consumer tastes are more homogenous; (ii) consumers are more sensitive to store practices; and (iii) a larger number of markets are served.
Mark A Cohen - One of the best experts on this subject based on the ideXlab platform.
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deepwater drilling law policy and economics of Firm Organization and safety
Vanderbilt Law Review, 2011Co-Authors: Mark A Cohen, Madeline Gottlieb, Joshua Linn, Nathan RichardsonAbstract:Although the causes of the Deepwater Horizon spill are not yet conclusively identified, significant attention has focused on the safety-related policies and practices-often referred to as the safety culture-of BP and other Firms involved in drilling the well. This Article defines and characterizes the economic and policy forces that affect safety culture and identifies reasons why those forces may or may not be adequate or effective from the public's perspective. Two potential justifications for policy intervention are that: (1) not all of the social costs of a spill may be internalized by a Firm; and (2) there may be principal-agent problems within the Firm, which could be reduced by external monitoring. The Article discusses five policies that could increase safety culture and monitoring: liability, financial responsibility (a requirement that a Firm's assets exceed a threshold), government oversight, mandatory private insurance, and risk-based drilling fees. We find that although each policy has a positive effect on safety culture, there are important differences and interactions that must be considered. In particular, the latter three policies provide external monitoring. Furthermore, raising liability caps without mandating insurance or raising financial responsibility requirements could have a small effect on the safety culture of small Firms that would declare bankruptcy in the event of a large spill. The Article concludes with policy recommendations for promoting stronger safety culture in offshore drilling; our preferred approach would be to set a liability cap for each well equal to the worst-case social costs of a spill and to require insurance up to the cap. I. INTRODUCTION 1854 II. LITERATURE REVIEW AND THEORY OF SAFETY CULTURE 1858 A. Literature on Safety Culture in High-Risk Industries 1859 1. Organizations with a Strong Safety Culture 1859 2. Organizations with a Weak Safety Culture 1862 3. Safety Culture at BP 1865 4. Why Aren't All Firms HROs? 1869 5. Summary of the Safety Culture Literature 1870 B. Theoretical Framework for Evaluating Government Policy and Safety Culture 1871 III. ECONOMIC INCENTIVES FOR SAFETY CULTURE IN DEEPWATER DRILLING 1876 A. Does the Market Punish a Poor Safety Record? 1876 B. Lack of Appropriate Information 1879 C. Conflicts of Interest Between Shareholders and Managers 1880 D. Conflicts of Interest Between Firm and Subcontractor 1885 IV. ANALYSIS OF POLICIES THAT AFFECT SAFETY CULTUEE .. 1886 A. Liability 1887 1. Fundamentals of Oil-Spill Liability Law 1888 2. Liability Caps 1890 3. Social Costs 1893 B. Financial Responsibility 1893 C. Government Oversight 1896 1. Monitoring 1896 2. Safety and Environmental Management Systems 1896 D. Mandatory Insurance 1898 1. …
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deepwater drilling law policy and economics of Firm Organization and safety
Vanderbilt Law Review, 2011Co-Authors: Mark A Cohen, Madeline Gottlieb, Joshua Linn, Nathan D RichardsonAbstract:Although the causes of the Deepwater Horizon spill are not yet conclusively identified, significant attention has focused on the safety-related policies and practices—often referred to as the safety culture—of BP and other Firms involved in drilling the well. This paper defines and characterizes the economic and policy forces that affect safety culture and identifies reasons why those forces may or may not be adequate or effective from the public’s perspective. Two potential justifications for policy intervention are that: a) not all of the social costs of a spill may be internalized by a Firm; and b) there may be principal-agency problems within the Firm, which could be reduced by external monitoring. The paper discusses five policies that could increase safety culture and monitoring: liability, financial responsibility (a requirement that a Firm’s assets exceed a threshold), government oversight, mandatory private insurance, and risk-based drilling fees. We find that although each policy has a positive effect on safety culture, there are important differences and interactions that must be considered. In particular, the latter three provide external monitoring. Furthermore, raising liability caps without mandating insurance or raising financial responsibility requirements could have a small effect on the safety culture of small Firms that would declare bankruptcy in the event of a large spill. The paper concludes with policy recommendations for promoting stronger safety culture in offshore drilling; our preferred approach would be to set a liability cap for each well equal to the worst-case social costs of a spill, and to require insurance up to the cap.
Nathan D Richardson - One of the best experts on this subject based on the ideXlab platform.
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deepwater drilling law policy and economics of Firm Organization and safety
Vanderbilt Law Review, 2011Co-Authors: Mark A Cohen, Madeline Gottlieb, Joshua Linn, Nathan D RichardsonAbstract:Although the causes of the Deepwater Horizon spill are not yet conclusively identified, significant attention has focused on the safety-related policies and practices—often referred to as the safety culture—of BP and other Firms involved in drilling the well. This paper defines and characterizes the economic and policy forces that affect safety culture and identifies reasons why those forces may or may not be adequate or effective from the public’s perspective. Two potential justifications for policy intervention are that: a) not all of the social costs of a spill may be internalized by a Firm; and b) there may be principal-agency problems within the Firm, which could be reduced by external monitoring. The paper discusses five policies that could increase safety culture and monitoring: liability, financial responsibility (a requirement that a Firm’s assets exceed a threshold), government oversight, mandatory private insurance, and risk-based drilling fees. We find that although each policy has a positive effect on safety culture, there are important differences and interactions that must be considered. In particular, the latter three provide external monitoring. Furthermore, raising liability caps without mandating insurance or raising financial responsibility requirements could have a small effect on the safety culture of small Firms that would declare bankruptcy in the event of a large spill. The paper concludes with policy recommendations for promoting stronger safety culture in offshore drilling; our preferred approach would be to set a liability cap for each well equal to the worst-case social costs of a spill, and to require insurance up to the cap.
Anna Gumpert - One of the best experts on this subject based on the ideXlab platform.
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Firm Organization with multiple establishments
Research Papers in Economics, 2019Co-Authors: Anna Gumpert, Henrike Steimer, Manfred AntoniAbstract:How do geographic frictions affect Firm Organization? We show theoretically and empirically that geographic frictions increase the use of middle managers in multi-establishment Firms. In our model, we assume that a CEO’s time is a resource in limited supply, shared across headquarters and establishments. Geographic frictions increase the costs of accessing the CEO. Hiring middle managers at one establishment substitutes for CEO time, which is reallocated across all establishments. Consequently, geographic frictions between the headquarters and one establishment affect the Organization of all establishments of a Firm. Our model is consistent with novel facts about multi-establishment Firm Organization that we document using administrative data from Germany. We exploit the opening of high-speed train routes to show that not only the establishments directly affected by faster travel times but also the other establishments of the Firm adjust their Organization. Our findings imply that local conditions propagate across space through Firm Organization.
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Firm Organization with multiple establishments
Social Science Research Network, 2019Co-Authors: Anna Gumpert, Henrike Steimer, Manfred AntoniAbstract:How do geographic frictions affect Firm Organization? We show theoretically and empirically that geographic frictions increase the use of middle managers in multi-establishment Firms. In our model, we assume that the time of the CEO of a Firm is a resource of limited supply that is shared among the headquarters and the establishments. Geographic frictions increase the costs of accessing the CEO. Hiring middle managers at an establishment substitutes for CEO time that is reallocated over all establishments. In consequence, geographic frictions between the headquarters and one establishment affect the Organization of all establishments of a Firm. Our model is consistent with novel facts about multi-establishment Firm Organization that we document using administrative data from Germany. We exploit the opening of high-speed train routes to show that not only the establishments directly affected by faster travel times but also the other establishments of the Firm adjust their Organization. Our findings imply that local conditions propagate across space through Firm Organization.
Gordon Phillips - One of the best experts on this subject based on the ideXlab platform.
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the industry life cycle and acquisitions and investment does Firm Organization matter
Social Science Research Network, 2005Co-Authors: Vojislav Maksimovic, Gordon PhillipsAbstract:We examine the effect of financial dependence on acquisition and investment within existing industries by single-segment and conglomerate Firms for industries undergoing different long-run changes in industry conditions. Conglomerates and single-segment Firms differ more for within-industry acquisitions, while capital expenditure rates are similar across Organizational type. In particular, 36 percent of within-industry growth by conglomerate Firms in growth industries is from intra-industry acquisitions versus nine percent for single-segment Firms. Financial dependence, a deficit in a segment's internal financing, decreases the likelihood of within-industry acquisitions and opening new plants, especially for single-segment Firms. These effects are mitigated for conglomerates in growth industries and also for Firms that are publicly traded. We also find that plants acquired by conglomerate Firms in growth industries increase in productivity post-acquisition. In declining industries, plants of segments that are financially dependent are less likely to be closed by conglomerate Firms. These findings persist after controlling for Firm size and segment productivity. The results are consistent with the comparative advantages of different Firm Organizations differing across long-run industry conditions.
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the industry life cycle and acquisitions and investment does Firm Organization matter
Research Papers in Economics, 2005Co-Authors: Vojislav Maksimovic, Gordon PhillipsAbstract:We examine the effect of financial dependence on the acquisition and investment of single segment and conglomerate Firms for different long-run changes in industry conditions. Conglomerates and single-segment Firms differ in the investments they make. The main differences are in the investment in acquisitions rather than in the level of capital expenditure. Financial dependence, a deficit in a segment’s internal financing, decreases the likelihood of acquisitions and opening new plants, especially for single-segment Firms. These effects are mitigated for conglomerates in growth industries and also for Firms that are publicly traded. In declining industries, plants of segments that are financially dependent are less likely to be closed by conglomerate Firms. These findings persist after controlling for Firm size and segment productivity. We also find that plants acquired by conglomerate Firms in growth industries increase in productivity post-acquisition. The results are consistent with the comparative advantages of different Firm Organizations differing across long-run industry conditions.
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The market for corporate assets: Who engages in mergers and asset sales and are there efficiency gains?
Journal of Finance, 2001Co-Authors: Vojislav Maksimovic, Gordon PhillipsAbstract:We analyze the market for corporate assets. There is an active market for corporate assets, with close to seven percent of plants changing ownership annually through mergers, acquisitions, and asset sales in peak expansion years. The probability of asset sales and whole-Firm transactions is related to Firm Organization and ex ante efficiency of buyers and sellers. The timing of sales and the pattern of efficiency gains suggests that the transactions that occur, especially through asset sales of plants and divisions, tend to improve the allocation of resources and are consistent with a simple neoclassical model of profit maximizing by Firms.