Recent years have seen a rise in global trade of “green products”—those designed to minimize environmental harm compared to traditional alternatives. In this study, we examine the relevance of pollution haven effects—i.e., shifts of production toward countries with less stringent environmental standards—in firms’ global sourcing strategies for green products. Given the importance of credible and sustainable manufacturing practices in firms’ global value chains for green products, we expect that country environmental standards shape global sourcing decisions for green versus non-green products differently. Our findings using data on global imports and exports for more than 5000 distinct products over the 2002–2019 period show that green products are more likely to be sourced from countries with higher environmental stringency, whereas non-green product sourcing patterns align with prior research, which emphasizes the appeal of lower environmental standards and cost-efficiency. This green sourcing effect is stronger for consumer-facing products and for sourcing into countries where consumer engagement in environmentalism is higher and non-governmental organizations are more active. Unlike prior research that implies that higher environmental standards hurt exporters, our results suggest that such standards can benefit green product exporters.

This paper examines the extent and determinants of internal agglomeration—the spatial clustering of establishments within firms. It introduces a novel methodology that benchmarks a firm's spatial footprint against that of comparable stand-alone firms, yielding a firm-level measure of internal agglomeration. Applied across sectors of the U.S. economy, the approach reveals that internal agglomeration is widespread but varies by industry and firm characteristics. It is more prevalent in service, non-tradable, and labor-intensive industries, and is especially pronounced among diversified firms. Among potential drivers, labor similarity consistently predicts intra-firm colocation, while input–output and knowledge linkages are less influential. These findings bring a spatial lens to corporate strategy, showing that when key resources—particularly labor—face geographic frictions, colocating related activities enhances opportunities for sharing and redeployment.

This paper examines the effects of temporal distance generated by time zone separation on communication in geographically distributed organizations. We build on prior research, which highlights time zone separation as a significant challenge, but argue that employees may time shift move work-related communication to outside of regular business hours—to counteract temporal distance. We propose a theory in which employees’ tendency to time shift depends on the demands of their tasks and collaborative relationships and individuals’ ability to supply work outside of regular business hours. Analyzing communication-level data from 12,038 employees of a large multinational firm and using cities’ shifts to/from daylight saving time for identification, we find that temporal distance leads to sizable but smaller than expected reductions in volumes of rich, synchronous communication between employees. Consistent with our arguments, increased temporal distance significantly increases time shifting of work-related communication, especially among workers whose jobs are nonroutine and interactions in strong collaborative relationships. We further document that female employees and employees based incountries with stricter legal work hour limits engage in significantly less time-shifted communication. Our study improves understanding of a ubiquitous source of collaboration friction. It also sheds light on a potential source of inequities in workplace outcomes stemming from differences in individuals’ ability to work outside of regular business hours.

Scarcity of productive factors poses a challenge for firms entering underdeveloped regions. We theorize that incumbent firms can overcome scarcity of skilled human capital in local labor markets by redeploying workers from existing units. We predict that redeployment is more valuable when factor markets exhibit large differences in resource scarcity. Redeployment is also more valuable when output is highly sensitive to worker skill and is responsive to complementarities between labor and other inputs. Important implications are that redeployment can endow firms with superior resources and enable them to enter more markets. Data on sugar mills in Brazil, where a sudden demand boom incentivized expansion, corroborate the predictions. Our research identifies a new mechanism of value-creation from resource redeployment across factor markets.

We examine to what extent and when multiunit firms internally redeploy managers between units. While theory has emphasized how changes in demand conditions affect redeployment, we argue that optimal internal resource allocation involves consideration of both demand and each unit's resource supply. We formalize this argument, showing how redeployment arises from “supply-side inducements”—return advantages in new over existing resource uses resulting from changes in resource supply. Empirical tests using manager deaths as an exogenous, supply-side shock to firms' resource stocks support our arguments, showing that firms frequently redeploy resources away from better-endowed and toward negatively affected units. Incorporating supply-side inducements into redeployment theory implies additional value-creation opportunities from redeployment and carries novel predictions for the direction of intra-firm resource flows.

Internal reallocation of human capital helps firms adjust to economic shocks, yet little evidence exists on how organizational design shapes the redeployment process. This paper examines how centralized versus decentralized decision-making authority affects the redeployment of workers when their establishments close. Using employer-employee matched data on Brazilian manufacturing firms and a triple difference event study design, we find that centralized firms increase redeployment more in response to establishment closure than decentralized firms. This effect is economically large and is most pronounced when closures coincide with exogenous shocks. It attenuates when firms face greater information-processing demands and when they operate under clear performance goals, consistent with theories emphasizing trade-offs between the information-processing costs of centralization and the agency problems of decentralization. For workers, redeployment mitigates the negative effects of closure. However, while redeployment shields workers from unemployment in both centralized and decentralized firms, workers redeployed in centralized firms experience significantly better post-redeployment earnings trajectories, suggesting superior matching to opportunities elsewhere in the firm. These findings shed light on how organizational design conditions firms’ responses to economic shocks.

We introduce the organizational barycenter, a novel empirical measure of spatial location and dispersion for distributed and remote organizations, contexts in which traditional location statistics such as headquarters and physical offices are less relevant. We first validate this measure, showing—mathematically and empirically—that barycentric measures of dispersion have similar informational content as traditional pairwise distance-based measures but are significantly more computationally efficient, enabling empirical analysis at scale. Moreover, unlike pairwise measures, the barycenter offers a statistic of organizational location which, under plausible assumptions, corresponds to a unique coordination-cost-minimizing point, giving it clear interpretive meaning and implications for decisions such as hiring and for individual performance. We apply the barycentric approach to data from more than 12,800 firms recorded in the Flex Index survey, as well as their 23 million worker records from Revelio Labs, to describe the evolving geography of work. Complementing this analysis with hand-collected survey data from 40 remote employees over 12 weeks, we show that employees’ distance to the organizational barycenter predicts lower communication efficacy and worse self-assessed performance, consistent with theories emphasizing distance-related coordination frictions. We conclude by discussing promising applications of barycentric measures for studying and designing distributed organizations.

How does geographic proximity among firms in the same industry affect firm performance? The existing evidence is mixed. I introduce a new empirical approach that exploits changes in effective proximity driven by road improvements. Using comprehensive firm-level data from Brazil, I find that the effects of increased colocation differ starkly depending on the spatial scope of industries’ product markets. In locally traded manufacturing industries, colocation leads to increased exit among the smallest firms, with the adverse effect attenuating for larger firms. When colocation increases, firms react strategically, relocating and switching their primary industry in ways that lower exposure to competitors. In contrast, when colocation increases in nationally traded industries, survival rates improve for firms of all sizes and fewer firms relocate. The findings of this study suggest that colocation intensifies both spatial competition and agglomeration forces, and that its effect on firm performance depends on the relative strength of these mechanisms in different industries.

How can Rwanda, which currently has one of the lowest levels of income and exports per capita in the world, grow and diversify its economy in presence of significant constraints? We analyze Rwanda’s historical growth and trade performance and find that Rwanda’s high transportation costs and limited productive knowledge have held back greater export development and have resulted in excessive rural density. Three basic commodities—coffee, tea, and tin—made up more than 80 percent of the country’s exports through its history and still drive the bulk of export growth today. Given Rwanda’s high population density and associated land scarcity, these traditional exports cannot create enough jobs for its growing population, or sustainably drive future growth. Rwanda needs new, scalable activities in urban areas. In this report, we identify a strategy for greater diversification of exports in Rwanda that circumvents the key constraints and is separately tailored for regional and global export destinations. Our results identify more than 100 tradable products that lie at Rwanda’s knowledge frontier, are not intensive in Rwanda’s scarce resources, and economize on transportation costs. Our analysis produces a vision of a more diversified Rwanda, which can be used as a guide for investment promotion decisions. We illustrate an approach that can be applied to other settings in order to identify opportunities for export diversification that take seriously local constraints and external market opportunities.

Research has sought to understand how foreign direct investment affects host economies. This paper reviews the empirical literature, specifically addressing the question: How does FDI affect economic development of host countries and what is the role of local financial markets in mediating the potential benefits? We first define FDI and discuss general theories on types and drivers of FDI. This review takes a host-country perspective rather than a firm perspective and thus only highlights the key insights from the rich firm-level literature on MNCs. We then focus on how financial conditions in host countries affect the extent of FDI-related capital inflows, shape the operations of foreign firms, and mediate the extent of productivity spillovers from FDI to local firms. The survey focuses mainly on work related to developing countries.

Projects that cross national boundaries give rise to the complex question of how the project's taxable income should be allocated among the national entities. This chapter utilizes a hypothetical mining project with the mine and infrastructure in two different countries to illustrate the fiscal issues arising out of cross-border projects. The unitary nature of the mine and its downstream infrastructure, each fully dependent upon the other, means that any exercise to separate the two into independent entities for tax purposes is highly arbitrary. No comparable uncontrolled transactions are likely to exist for applying the traditional arms-length principle. The cost-plus method can result in estimates for taxable income allocated to the downstream jurisdiction that vary by a factor of four or more. An alternative, not without its own limitations, is to apply a profit-split or formulary allocation to apportion income between jurisdictions. These ambiguities become particularity important when tax rates in the relevant national entities differ because then they can be used strategically, namely to shift project income to the more favorable jurisdiction.

From 1989 to 2003 civil war raged in Liberia, causing GDP per capita to drop an unprecedented 90% from peak to trough. The roots of Liberia's conflict and economic decline are complex and intertwined, resting on over a century of discriminatory elite rule and twisted by ethnic politics during a military dictatorship. By late 2011, eight years of post-conflict government have restored basic order, re-opened the country to foreign investors, and jump-started the small economy. But the country's business model may unsettle its political stability. As Africa's first democratically elected female head of state (and a recipient of the Nobel Peace Prize) Ellen Johnson Sirleaf goes into her reelection campaign for Liberia's presidency, she must decide how to keep the country on its fragile but quick recovery, sowing the seeds for peace and prosperity rather than renewed conflict.