Firms exhibit heterogeneity in size, productivity, and internal structure, and this is true even within the same industry. Our paper provides evidence of a link between an organization's culture — specifically the trust environment — and its level of specialization. We show experimentally that exogenously imposed culture endogenously leads to variation in organizational form. We prime trust and demonstrate that the level of trust within an organization aects division of labor and consequently productivity. This evidence is consistent with a cross-country link between trust and the division of labor that we observe in data from the European Social Survey.
Meier, Stephan, and Matthew Stephenson. "Culture of Trust and Division of Labor." Columbia University, Graduate School of Business, June 24, 2015.
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