{"title":"Spatial wage differentials, geographic frictions and the organization of labor within firms","authors":"Camilo Acosta , Ditte Håkonsson Lyngemark","doi":"10.1016/j.regsciurbeco.2025.104128","DOIUrl":null,"url":null,"abstract":"<div><div>This paper studies the spatial organization of firms, both theoretically and empirically. Two new facts in Danish register data motivate the analysis: (i) firms have become increasingly spatially fragmented, and (ii) headquarters (HQ) establishments have become more manager-intensive. We develop and estimate a structural model in which firms allocate labor across establishments and produce non-rival, manager-intensive HQ services. Identification relies on exogenous variation in labor supply induced by commuting-augmented immigration shocks. We estimate elasticities of substitution across establishments of −9.8 for workers and −1.1 for managers, consistent with firms reallocating general labor more easily than managerial inputs. Our decomposition shows that rising managerial wages at HQs – interacted with firm-level scale effects – explain about half of the observed increase in HQ managerial intensity, highlighting the importance of intangible internal inputs in shaping firm spatial structure.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104128"},"PeriodicalIF":3.5000,"publicationDate":"2025-06-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Regional Science and Urban Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0166046225000456","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper studies the spatial organization of firms, both theoretically and empirically. Two new facts in Danish register data motivate the analysis: (i) firms have become increasingly spatially fragmented, and (ii) headquarters (HQ) establishments have become more manager-intensive. We develop and estimate a structural model in which firms allocate labor across establishments and produce non-rival, manager-intensive HQ services. Identification relies on exogenous variation in labor supply induced by commuting-augmented immigration shocks. We estimate elasticities of substitution across establishments of −9.8 for workers and −1.1 for managers, consistent with firms reallocating general labor more easily than managerial inputs. Our decomposition shows that rising managerial wages at HQs – interacted with firm-level scale effects – explain about half of the observed increase in HQ managerial intensity, highlighting the importance of intangible internal inputs in shaping firm spatial structure.
期刊介绍:
Regional Science and Urban Economics facilitates and encourages high-quality scholarship on important issues in regional and urban economics. It publishes significant contributions that are theoretical or empirical, positive or normative. It solicits original papers with a spatial dimension that can be of interest to economists. Empirical papers studying causal mechanisms are expected to propose a convincing identification strategy.