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What drives differences in management practices?

Bloom, Nicholas, Brynjolfsson, Erik, Foster, Lucia, Jarmin, Ron, Patnaik, Megha, Saporta-Eksten, Itay and Van Reenen, John ORCID: 0000-0001-9153-2907 (2019) What drives differences in management practices? American Economic Review, 109 (5). 1648 - 1683. ISSN 0002-8282

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Identification Number: 10.1257/aer.20170491


Partnering with the US Census Bureau, we implement a new survey of "structured" management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We fnd an enormous dispersion of management practices across plants, with 40 percent of this variation across plants within the same frm. Management practices account for more than 20 percent of the variation in productivity, a similar, or greater, percentage as that accounted for by R&D, ICT, or human capital. We fnd evidence of two key drivers to improve management. The business environment, as measured by right-to-work laws, boosts incentive management practices. Learning spillovers, as measured by the arrival of large "Million Dollar Plants" in the county, increases the management scores of incumbents.

Item Type: Article
Official URL:
Additional Information: © 2019 AEA
Divisions: Economics
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales
D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital and Total Factor Productivity; Capacity
L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M11 - Production Management
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M50 - General
Date Deposited: 17 Jul 2019 09:18
Last Modified: 11 Jul 2024 21:06

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