Companies, Industries, and the Measurement of Economic Segmentation

There has been much debate in the growing literature on economic segmentation on the relative merits of companyand industry-level measures of economic structure. The current analysis suggests that this debate has been incorrectly posed. Both companies and industries represent meaningful units of analysis that embody consequences for economic segmentation. The most important company characteristic in the wage determination process is found to be plant employment size. The most important industrial characteristic is found to be level of capital usage. Companyand industry-level sectoral measures are also compared and evaluated. These sectoral measures are associated only to a moderate degree and have distinct consequences for labor force outcomes. Together, these findings suggest distinct roles for company and industrial models of economic segmentation. The paper concludes with the argument that companies and industries represent distinct levels of economic segmentation, each of which deserves conceptualization in its own right.