TY - JOUR AU - Acemoglu,Daron AU - Aghion,Philippe AU - Lelarge,Claire AU - Reenen,John Van AU - Zilibotti,Fabrizio TI - Technology, Information and the Decentralization of the Firm JF - National Bureau of Economic Research Working Paper Series VL - No. 12206 PY - 2006 Y2 - May 2006 UR - http://www.nber.org/papers/w12206 L1 - http://www.nber.org/papers/w12206.pdf N1 - Author contact info: Daron Acemoglu Department of Economics MIT, E52-380B 50 Memorial Drive Cambridge, MA 02142-1347 Tel: 617/253-1927 Fax: 617/253-1330 E-Mail: daron@mit.edu Philippe Aghion Department of Economics Harvard University 1805 Cambridge St Cambridge, MA 02138 Tel: 617/495-6675 Fax: 617/495-4341 E-Mail: paghion@fas.harvard.edu Claire LeLarge Priv. 97 rue de la Tombe Issoire 75 014 PARIS FRANCE E-Mail: claire.lelarge@gmail.com John Van Reenen Department of Economics London School of Economics Centre for Economic Performance Houghton Street London WC2A 2AE UNITED KINGDOM Tel: 00 44 207/955-6976 Fax: 00 44 207/955-6848 E-Mail: j.vanreenen@lse.ac.uk Fabrizio Zilibotti IIES Stockholm University Hus A, Trappa 8 SE 10691, Stockholm Sweden Tel: +46 8 162225 E-Mail: zilibott@iew.uzh.ch M2 - featured in NBER digest on 2006-05-08 AB - This paper develops a framework to analyze the relationship between the diffusion of new technologies and the decentralization decisions of firms. Centralized control relies on the information of the principal, which we equate with publicly available information. However, the manager can use her informational advantage to make choices that are not in the best interest of the principal. As the available public information about the specific technology increases, the trade-off shifts in favor of centralization. We show that firms closer to the technological frontier, firms in more heterogeneous environments and younger firms are more likely to choose decentralization. Using three datasets of French and British firms in the 1990s we report robust correlations consistent with these predictions. ER -