Do well managed firms make better forecasts?

Bloom, Nicholas, Kawakubo, Taka, Meng, Charlotte, Mizen, Paul, Riley, Rebecca, Senga, Tatsuro and Van Reenen, John ORCID: 0000-0001-9153-2907 (2022) Do well managed firms make better forecasts? CEP Discussion Papers (1821). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

Text (dp1821) - Published Version Download (1MB)

• Publisher
• Author
• Author
• Author
• https://cep.lse.ac.uk/_NEW/PUBLICATIONS/...

Abstract

We link a new UK management survey covering 8,000 firms to panel data on productivity in manufacturing and services. There is a large variation in management practices, which are highly correlated with productivity, profitability and size. Uniquely, the survey collects firms' micro forecasts of their own sales and also macro forecasts of GDP. We find that better managed firms make more accurate micro and macro forecasts, even after controlling for their size, age, industry and many other factors. We also show better managed firms appear aware that their forecasts are more accurate, with lower subjective uncertainty around central values. These stylized facts suggest that one reason for the superior performance of better managed firms is that they knowingly make more accurate forecasts, enabling them to make superior operational and strategic choices.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2022 The Authors
Divisions:	LSE Centre for Economic Performance Economics
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HB Economic Theory
JEL classification:	L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General M - Business Administration and Business Economics; Marketing; Accounting > M2 - Business Economics > M20 - General O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O32 - Management of Technological Innovation and R&D O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
Date Deposited:	06 Jan 2023 11:12
Last Modified:	15 Sep 2023 23:58
URI:	http://eprints.lse.ac.uk/id/eprint/117748

Actions (login required)

View Item