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Newsletter
The changing relationship between headquarters and cities
A recent Chicago Fed conference looked at the shifting geography of company headquarters, with a public policy focus on headquarters as a much-desired target of economic development efforts.
Journal Article
Professional employer organizations: What are they, who uses them, and why should we care?
Using both public and confidential data, the authors summarize how the intensity of use of professional employer organization (PEO) services varies across industries and geographical areas. Their analyses using microdata of manufacturing establishments suggest that the use of PEO services depends on the size of the establishment and of its parent firm. The use of PEO services is greater for newly constructed establishments, as well as for establishments with a potentially high injury and illness rate. Greater diversification across industries and geographical areas of a parent firm may also ...
Working Paper
Firm boundaries and buyer-supplier match in market transaction: IT system procurement of U.S. credit unions
By examining IT system procurement between U.S. Credit Unions (CUs) and IT vendors, we present descriptive analyses showing that firms? outsourcing decisions might be interrelated to each other through suppliers? market entry decisions. The buyer-supplier match in the market might also play an important role in determining firms? boundaries. We also argue that market thickness along the product space might determine the characteristics of input that is procured through the market.
Newsletter
Why do firms use temporary workers?
This article explores the pros and cons of using temporary workers and their permanent counterparts. It examines firms? various motivations for using temporary employment, accounting for geographical and industry differences.
Journal Article
Temporary help services and the volatility of industry output
To gain a better understanding of how fluctuations in output influence firms' decision to hire temporary workers, the authors examine the relationship between output volatility and the use of temporary labor. They find that, all things being equal, temporary employment is higher in states with more volatile industries and lower in states with a relatively high degree of co-movement of industry output fluctuations.
Working Paper
Demand volatility and the lag between the growth of temporary and permanent employment
The growth rate of temporary help service employment is often considered to be a leading business cycle indicator, because the firing and hiring of temporary help workers typically lead that of permanent workers. However, few works in the literature focus on the mechanism that generates the lag between temporary and permanent growth. This paper investigates how demand volatility is related to the lag. Focusing on the relationship between a firm?s information extraction and their hiring/firing decisions, our simple model predicts that the average size of transitory demand shocks increase the ...
Working Paper
Manufacturing plants’ use of temporary workers: an analysis using census micro data
Using plant-level data from the Plant Capacity Utilization (PCU) Survey, we examine how a manufacturing plant?s use of temporary workers is associated with the nature of its output fluctuations. Our empirical evidence suggests that plants choose temps over perms when they expect output to fall, which allows them to avoid costs associated with laying off permanent employees. We also found that plants whose output levels are associated with greater levels of uncertainty use more temps. The effects of other variables are also tested in order to examine the validity of various views about why ...
Working Paper
Spatial organization of firms
A firm?s production activities are often supported by non-production activities. Among these activities are administrative units including headquarters, which process information both within and between firms. Often firms physically separate such administrative units from their production activities and create stand alone Central Administrative Offices (CAO). However, having its activities in multiple locations potentially imposes significant internal firm face-to-face communication costs. What types of firms are more likely to separate out such functions? If firms do separate administration ...
Working Paper
Outsourcing business services and the role of central administrative offices
In this paper, I study whether there is any evidence that the market scale surrounding a central administrative office (CAO), which includes corporate headquarters, influences a firm's cost-effectiveness in procuring business services. By linking plant-level data from the 1992 Annual Survey of Manufactures with CAO information from the Survey of Auxiliary Establishments, I examine manufacturing plants' practice of outsourcing services in relation to the size of the local service market surrounding the plant and that surrounding the plant's CAO. I found statistically significant evidence that ...
Working Paper
Supplier switching and outsourcing
We examine supplier switching decisions using a unique database that tracks firms (credit unions) and their suppliers (data processing vendors); the data are in a panel, allowing us to track supplier switching decisions at a new level of detail. We focus on two sets of relationships. First, we estimate a model that relates supplier choices and switching to a variety of buyer- and supplier-specific characteristics. Second, we examine how> switching depends on the vendor relationships that credit unions choose: one is a partial form of outsourcing while the other is more complete. This allows ...