Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336598 
Year of Publication: 
2025
Series/Report no.: 
Discussion Paper No. 548
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
Abstract: 
This paper empirically examines how management practices affect firm productivity over the business cycle. Using plant-level high-dimensional human resource policies survey data collected in Spain in 2006, we employ unsupervised machine learning to describe clusters of management practices ("management styles"). We establish a positive correlation between a management style associated with structured management and performance prior to the 2008 financial crisis. Interestingly, this correlation turns negative during the financial crisis and positive again in the economic recovery post-2013. Our evidence suggests firms with more structured management are more likely to have practices fostering culture and intangible investments such that they focus in long-run profitability, prioritizing innovation over cost reduction, while having higher adjustment costs in the short-run through higher share of fixed assets and lower employee turnover.
Subjects: 
Management Practices
Culture
Unsupervised Machine Learning
Productivity
Great Recession
JEL: 
M12
D22
C38
Document Type: 
Working Paper

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