Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142426
Authors: 
Bloom, Nicholas
Sadun, Raffaella
Van Reenen, John
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9987
Abstract: 
Are some management practices akin to a technology that can explain company and national productivity, or do they simply reflect contingent management styles? We collect data on core management practices from over 11,000 firms in 34 countries. We find large cross-country differences in the adoption of basic management practices, with the US having the highest size-weighted average management score. We present a formal model of "Management as a Technology", and structurally estimate it using panel data to recover parameters including the depreciation rate and adjustment costs of managerial capital (both found to be larger than for tangible non-managerial capital). Our model also predicts (i) a positive effect of management on firm performance; (ii) a positive relationship between product market competition and average management quality (part of which stems from the larger covariance between management with firm size as competition strengthens); and (iii) a rise (fall) in the level (dispersion) of management with firm age. We find strong empirical support for all of these predictions in our data. Finally, building on our model, we find that differences in management practices account for about 30% of cross-country total factor productivity differences.
Subjects: 
management practices
productivity
competition
JEL: 
L2
M2
O32
O33
Document Type: 
Working Paper

Files in This Item:
File
Size
1.77 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.