Competition, agency and productivity
University of Melbourne Author/sROGERS, MARK
AffiliationEconomics and Commerce: Melbourne Institute of Applied Economic and Social Research
CitationsRogers, Mark (2003) Competition, agency and productivity.
Access StatusOpen Access
ISBN 0734031335 ISSN 1328-4991 (Print) ISSN 1447-5863 (Online) MIWP No. 20/03
This paper tests a set of hypotheses relating to agency and Schumpeterian views on how competition affects performance. A survey data set of Australian workplaces is used, with the change in labour productivity growth as the dependent variable. The results show strong support for the idea that intense competition raises productivity growth in managerial workplaces, but not in non-managerial workplaces (i.e. where the principal owner also works). Testing the agency theories in more detail we find no evidence that the number of competitors, the price elasticity of demand or a proxy for bankruptcy (pre-tax losses) are the mechanisms behind the process. For nonmanagerial workplaces the results indicate support for the idea that greater demand uncertainty reduces productivity growth. In contrast, for managerial workplaces greater demand uncertainty tends to raise productivity growth
KeywordsCompetition; agency; Schumpeterian; productivity J.E.L. classification: L1: market structure; firm strategy; and market performance
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