Within-firm Labor Productivity across Countries

Francine Lafontaine and Jagadeesh Sivadasan

in International Differences in the Business Practices and Productivity of Firms

Published by University of Chicago Press

Published in print October 2009 | ISBN: 9780226261942
Published online February 2013 | e-ISBN: 9780226261959 | DOI:
Within-firm Labor Productivity across Countries

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This chapter presents a study that used weekly data from the outlets of an international retail food chain to analyze how labor productivity—defined as the number of items produced per working hour—varies with outlet characteristics and organizational factors such as experience levels of the workers, average order size, governance, execution, and compliance differences, and a cross-country index of the severity of labor regulations. The chapter found that execution quality has a negative effect on labor productivity as expected, outlet age beyond the first year of operation and increases in the number of experienced employees do not have a statistically significant effect on labor productivity, and larger order sizes improve labor productivity. The effect of governance form is ambiguous, and the choice of governance form appears to be correlated with unobserved country fixed effects. Finally, a high frequency of the data was used to develop an empirical strategy that would allow us to estimate the net impact of the labor law rigidity on the output at the outlet level

Keywords: labor productivity; countries; cross cultural differences; food chain; organizational factors; outlet characteristics

Chapter.  15004 words. 

Subjects: International Economics

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