Capital and Labor Reallocation within Firms
We document how a positive shock to investment opportunities at one plant (“treated plant”) spills over to other plants within the same firm, but only if the firm is financially constrained. To provide the treated plant with resources, the firm's headquarters withdraws capital and labor from ot...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
| Published: |
American Finance Association/Wiley
2015
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| Online Access: | http://hdl.handle.net/1721.1/98841 https://orcid.org/0000-0002-4620-4151 |
| _version_ | 1826209606612811776 |
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| author | Giroud, Xavier Mueller, Holger M. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Giroud, Xavier Mueller, Holger M. |
| author_sort | Giroud, Xavier |
| collection | MIT |
| description | We document how a positive shock to investment opportunities at one plant (“treated plant”) spills over to other plants within the same firm, but only if the firm is financially constrained. To provide the treated plant with resources, the firm's headquarters withdraws capital and labor from other plants, especially plants that are relatively less productive, not part of the firm's core industries, and located far away from headquarters. As a result of the resource reallocation, aggregate firm-wide productivity increases. We do not find evidence of capital or labor spillovers among plants of financially unconstrained firms. |
| first_indexed | 2024-09-23T14:25:08Z |
| format | Article |
| id | mit-1721.1/98841 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T14:25:08Z |
| publishDate | 2015 |
| publisher | American Finance Association/Wiley |
| record_format | dspace |
| spelling | mit-1721.1/988412022-09-29T09:21:48Z Capital and Labor Reallocation within Firms Giroud, Xavier Mueller, Holger M. Sloan School of Management Giroud, Xavier We document how a positive shock to investment opportunities at one plant (“treated plant”) spills over to other plants within the same firm, but only if the firm is financially constrained. To provide the treated plant with resources, the firm's headquarters withdraws capital and labor from other plants, especially plants that are relatively less productive, not part of the firm's core industries, and located far away from headquarters. As a result of the resource reallocation, aggregate firm-wide productivity increases. We do not find evidence of capital or labor spillovers among plants of financially unconstrained firms. 2015-09-18T17:10:28Z 2015-09-18T17:10:28Z 2015-07 Article http://purl.org/eprint/type/JournalArticle 00221082 1540-6261 http://hdl.handle.net/1721.1/98841 Giroud, Xavier, and Holger M. Mueller. “Capital and Labor Reallocation Within Firms.” The Journal of Finance 70, no. 4 (July 23, 2015): 1767–1804. https://orcid.org/0000-0002-4620-4151 en_US http://dx.doi.org/10.1111/jofi.12254 The Journal of Finance Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf American Finance Association/Wiley SSRN |
| spellingShingle | Giroud, Xavier Mueller, Holger M. Capital and Labor Reallocation within Firms |
| title | Capital and Labor Reallocation within Firms |
| title_full | Capital and Labor Reallocation within Firms |
| title_fullStr | Capital and Labor Reallocation within Firms |
| title_full_unstemmed | Capital and Labor Reallocation within Firms |
| title_short | Capital and Labor Reallocation within Firms |
| title_sort | capital and labor reallocation within firms |
| url | http://hdl.handle.net/1721.1/98841 https://orcid.org/0000-0002-4620-4151 |
| work_keys_str_mv | AT giroudxavier capitalandlaborreallocationwithinfirms AT muellerholgerm capitalandlaborreallocationwithinfirms |