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Organizational Dynamics and Aggregate Fluctuations: The Role of Financial Relationships

Otsu, Keisuke, Saito, Masashi (2013) Organizational Dynamics and Aggregate Fluctuations: The Role of Financial Relationships. Journal of Economic Dynamics and Control, 37 (12). pp. 3044-3058. ISSN 0165-1889. (doi:10.1016/j.jedc.2013.07.010) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
http://dx.doi.org/10.1016/j.jedc.2013.07.010

Abstract

This paper constructs an estimated dynamic stochastic general equilibrium model to study the role of labor reallocation between production and organizational tasks within a firm in movements in measured TFP in Japan. Allocating more labor to organizational tasks strengthens the financial relationship with financial intermediaries and helps firms to mitigate a widening in credit spread during financial difficulties. However, doing so reduces the labor allocated to production tasks and hence the measured TFP. Our quantitative analysis indicates that labor reallocation contributes to the observed procyclicality in measured TFP. We also find that this mechanism amplifies and propagates the effects of exogenous shocks on aggregate activity.

Item Type: Article
DOI/Identification number: 10.1016/j.jedc.2013.07.010
Additional information: number of additional authors: 1;
Uncontrolled keywords: Labor reallocation; Financial relationship; Organizational capital; TFP; Aggregate fluctuations
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Stewart Brownrigg
Date Deposited: 07 Mar 2014 00:05 UTC
Last Modified: 29 May 2019 12:26 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/40546 (The current URI for this page, for reference purposes)
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