How Does International Competition Affect the Power Distribution in Firms?

In recent years, corporations have become more decentralized and decision-making power within the company has moved from the top level to lower levels of management. DALIA MARIN and her research team are interested in the question of how international trade has affected these changes in the organization of firms. As she explains in this video, they have used recent mathematical models of trade and have combined these with the theory of the firm. Then they tested this theory with empirical data collected in interviews in Austria and Germany. Their findings suggest that the level of international competition has an impact on whether firms choose centralized or decentralized power structures and changes in competition also tend to influence these structures. These insights allow new predictions on the future organization of international trade.