TY  - JOUR
AU  - Campbell,Jeffrey R.
AU  - Fisher,Jonas D.M.
TI  - Organizational Flexibility and Employment Dynamics at Young and Old     Plants
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6809
PY  - 1998
Y2  - November 1998
UR  - http://www.nber.org/papers/w6809
L1  - http://www.nber.org/papers/w6809.pdf
N1  - Author contact info:
Jeffrey R. Campbell
Senior Economist
Economic Research Department
Federal Reserve Bank of Chicago
230 South LaSalle Street
Chicago, IL 60604-1413
Tel: 312/322-6156
Fax: 312/322-2357
E-Mail: jcampbell@frbchi.org

Jonas Fisher
Economic Research Department
Federal Reserve Bank of Chicago
230 South LaSalle Street
Chicago, IL  60604
Tel: 312/312-8177
Fax: NA
E-Mail: jfisher@frbchi.org
AB  - There are significant differences in the dynamics of employment over the business cycle between young and old manufacturing plants.  Young plants are more sensitive to aggregate disturbances, and they respond to them along different margins. We interpret these differences as reflecting greater organizational flexibility at young plants due to the changing nature of a plant's environment as it ages.  In the presence of aggregate uncertainty, differences between young and old plants' organizational flexibility allows the model to reproduce their distinct cyclical characteristics.  Previous empirical studies show that small firms generally respond by more to aggregate shocks than do large firms.  To the extent that small firms tend to operate young plants, our analysis suggests an alternative to conventional explanations of this evidence which appeal to imperfections in credit markets.
ER  -