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of vertical integration and delegation for a large set of firms from many countries and industries. In line with the … model's predictions, we obtain three main results: (i) integration and delegation co-vary positively; (ii) producers are … more likely to integrate suppliers in input sectors with greater productivity variation (as the option value of integration …
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of vertical integration and delegation for a large set of firms from many countries and industries. In line with the … model's predictions, we obtain three main results: (i) integration and delegation co-vary positively; (ii) producers are … more likely to integrate suppliers in input sectors with greater productivity variation (as the option value of integration …
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We argue that social capital as proxied by regional trust and the Rule of Law can improve aggregate productivity through facilitating greater firm decentralization. We collect original data on the decentralization of investment, hiring, production and sales decisions from Corporate Head Quarters...
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