DP4129 Globalization and the Empowerment of Talent

Author(s): Dalia Marin, Thierry Verdier
Publication Date: December 2003
Keyword(s): international trade with endogenous organizations, Rybczynski Theorem of firm organization, the rise of human capital, theory of the firm
JEL(s): D23, F12, F14, L22
Programme Areas: Industrial Organization, International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4129

Globalization has been identified by many experts as a new way firms organize their activities and also as the emergence of talent as the new stakeholder in the firm. This Paper examines the role of trade integration for the changing nature of the corporation. International trade leads to a ?war for talent?, which makes it more likely that an organizational equilibrium emerges in the integrated world economy in which control is delegated to lower levels of the firms? hierarchy empowering human capital. Furthermore, trade integration is shown to lead to waves of outsourcing and to convergence in corporate cultures across countries.