Managerial Leverage Is Limited By the Extent of the Market : Hierarchies , Specialization , and the Utilization of Lawyers ’ Human Capital

@inproceedings{Garicano2005ManagerialLI,
  title={Managerial Leverage Is Limited By the Extent of the Market : Hierarchies , Specialization , and the Utilization of Lawyers ’ Human Capital},
  author={Luis Garicano and Thomas N. Hubbard},
  year={2005}
}
This paper examines hierarchies’ role in the organization of human-capital-intensive production We develop an equilibrium model of hierarchical organization, then provide empirical evidence using confidential data on thousands of law offices from the 1992 Census of Services. We show how the equilibrium assignment of individuals to hierarchical positions varies with the degree to which their human capital is field-specialized, then show how this equilibrium changes with the extent of the market… CONTINUE READING
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