Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/79168
Authors: 
Epstein, Gil S.
Gang, Ira N.
Year of Publication: 
2002
Series/Report no.: 
Working Papers, Department of Economics, Rutgers, The State University of New Jersey 2002,18
Abstract: 
Hierarchical firms are enterprises with rigid internal job ladders. We examine the state enterprise as the prototypical hierarchical firm. In the state enterprise, promotion of employees through the internal hierarchy is determined by the workers’ allocation of time between rent seeking and productive activity. Our model shows that given the incentive structure of the state enterprise we tend to see less productive and more adept rent seekers at senior management positions in such firms. Moreover, as we move up the firm’s hierarchy, a decline in the productivity levels of the workers will be observed.
Subjects: 
hierarchical firms
internal job ladder
promotion
rent-seeking
state enterprise
JEL: 
D2
D72
L32
Document Type: 
Working Paper

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