capital budgeting process get withinfirm allocations right, so that the marginal return to investment in firm i’s division A is the same as the marginal return to investment in firm i’s division B? In addition to discussing the theoretical and empirical work that bears most directly on these questions

We propose a new measure of allocative efficiency based on unrealized increases in aggre-gate productivity growth. We show that the difference in the value of the marginal product of an input and its marginal cost at any plant- the plant-input “gap ”- is exactly equal to the change in aggregate

Using confidential Census data on U.S. manufacturing plants, we document that most of the dispersion in investment rates across plants occurs within firms instead of across firms. Contrary to between-firm dispersion, within-firm dispersion is strongly procyclical. To investigate the role of firms

the amount of severance payments. This paper empirically assesses the impact of these reforms on the allocative efficiency of the labor input employing Petrin and Sivadasans (2011) value of the marginal product-marginal cost gap methodology. We find a statistically significant increase in within-firm

the challenge of allocating workers into endogenous groups (or teams) to maximize total profits. The optimal allocation features locational proximity between workers with similar productivity levels. I discuss the implications of this allocation on intra-firm wage outcomes. The main idea is that the wage paid

of heterogeneous workers, the manager faces the challenge of allocating workers into endogenous groups (or teams) to maximize total profits. The optimal allocation features locational proximity between workers with similar productivity levels. I discuss the implications of this allocation on intra-firm wage