Technology, Information and the Decentralization of the Firm / Daron Acemoglu, Philippe Aghion, Claire Lelarge, John Van Reenen, Fabrizio Zilibotti.

Format:

Book

Author/Creator:

Acemoglu, Daron.

Contributor:

National Bureau of Economic Research.

Aghion, Philippe.

Lelarge, Claire.

Van Reenen, John.

Zilibotti, Fabrizio.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12206.

NBER working paper series no. w12206

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

This paper develops a framework to analyze the relationship between the diffusion of new technologies and the decentralization decisions of firms. Centralized control relies on the information of the principal, which we equate with publicly available information. However, the manager can use her informational advantage to make choices that are not in the best interest of the principal. As the available public information about the specific technology increases, the trade-off shifts in favor of centralization. We show that firms closer to the technological frontier, firms in more heterogeneous environments and younger firms are more likely to choose decentralization. Using three datasets of French and British firms in the 1990s we report robust correlations consistent with these predictions.

Notes:

Print version record

May 2006.