Introduction

Exporting affects the organization of production. In order to produce at the scale needed to access export markets, firms need to hire teams of workers with a different set of skills, pay them different wages and give them different roles within the organization. In this chapter we explore how a firm’s organization reacts to new or improved export opportunities. Guided by the theory of knowledgebased hierarchies,1 we understand organization as the characteristics and roles played by the workers within a firm. Hence, we explore how the number of management layers, as well as the number of workers and wages in each of these layers, change when the firm starts exporting or expands its presence in foreign markets. Our goal is to document these relationships and attempt to rationalize them using available theories. Given that these reorganizations have important implications for the size, hiring practices and productivity of exporting firms, the findings are relevant to understand the overall effects of trade liberalizations, as demonstrated by Caliendo and Rossi-Hansberg (2012, from now on CRH).