Publication:
Organizational Hierarchies and Export Destinations

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Embargoed until 2026-02-16
Embargoed until 2026-02-16
Date
2025-05-23
ISSN
1564-698X
Published
2025-05-23
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Abstract
This paper proposes a new link relating export destinations and the organization of the firm: the production of higher-quality varieties exported to rich destinations induces firms to restructure their production processes, becoming organizationally more complex. A theoretical model with these features is presented, and then the mechanisms are explored using a panel of Chilean manufacturing plants. The identification strategy of the paper relies on falling tariffs on Chilean products across destinations caused by the signature of Free Trade Agreements with high-income countries (the European Union, the United States, and South Korea). Results show that Chilean plants induced by these tariff reductions to start exporting to high-income destinations increased the number of hierarchical layers and upgraded the quality of their products. This involved the addition of qualified supervisors who facilitated the provision of higher product quality. These effects took place at new high-income export firms.
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Brambilla, Irene; César, Andrés; Falcone, Guillermo; Guido, Porto. 2025. Organizational Hierarchies and Export Destinations. © World Bank. http://hdl.handle.net/10986/43235 License: CC BY 3.0 IGO.
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