Does Economic Crisis Spur Organizational Change? Evidence from Chilean Manufacturing Plants

36 Pages Posted: 26 Oct 2006

See all articles by Roberto Alvarez

Roberto Alvarez

University of Chile - Department of Economics

Jose Miguel Benavente

University of Chile - Department of Economics

Gustavo Crespi

University of Chile - Department of Economics

Date Written: October 2006

Abstract

Recent theoretical models have shown that when demand is slack, firms tend to introduce new management practices and/or reorganize their production methods; however, few micro econometric studies deal directly with the relationship between organizational change and economic crises. In this paper, we use data from Chilean manufacturing plants, and the international financial crisis of 1998, in a sort of 'natural experiment', to shed light on this phenomenon. Using National Survey of Technological Innovation statistics for two years both and before and during the financial crisis, we study how different measures of organizational change responded to the economic crisis. In addition, we analyse the impact on product and process innovation. Our results are consistent with the idea that economic crises make organizational change more likely, but that their effect is not limited to this kind of change or innovation.

Keywords: organizational change, innovation

JEL Classification: D23, L23, M11, O33

Suggested Citation

Alvarez, Roberto and Benavente, Jose Miguel and Crespi, Gustavo, Does Economic Crisis Spur Organizational Change? Evidence from Chilean Manufacturing Plants (October 2006). Available at SSRN: https://ssrn.com/abstract=940400 or http://dx.doi.org/10.2139/ssrn.940400

Roberto Alvarez (Contact Author)

University of Chile - Department of Economics ( email )

Diagonal Paraguay 257
Torre 26, Of. 1801
Santiago
Chile

Jose Miguel Benavente

University of Chile - Department of Economics ( email )

Diagonal Paraguay 257
Torre 26, Of. 1801
Santiago
Chile

Gustavo Crespi

University of Chile - Department of Economics ( email )

Diagonal Paraguay 257
Torre 26, Of. 1801
Santiago
Chile
+56 2 678 3461 or 678 3463 (Phone)
+56 2 222 0775 (Fax)

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