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Management practices across firms and nations

Bloom, Nick, Dorgan, Stephen, Dowdy, John, Van Reenen, John and Rippin, Tom (2005) Management practices across firms and nations. Centre for Economic Performance special papers, CEPSP17. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

We use an innovative survey tool to collect management practice data from 731 medium sized manufacturing firms in Europe and the US. We find these are strongly associated with better firm performance in terms of productivity, return on capital employed (profitability), Tobin’s Q and sales growth. We also find a surprisingly large dispersion of management practices across firms with a long ‘tail’ of poorly managed firms. This presents a dilemma - why do so many firms continue to exist while apparently deploying inferior management practices? Our analysis suggests that this is due, in part, to a combination of: (i) competition, with tougher product market competition fostering better management practices; (ii) firm age, with younger market entrants utilising better management techniques; and (iii) regulation, with stronger labour market regulation apparently inhibiting the deployment of best practice management.

Item Type: Monograph (Other)
Official URL: http://cep.lse.ac.uk
Additional Information: © 2005 the authors
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: CEPSP17
Date Deposited: 07 May 2008 08:48
URL: http://eprints.lse.ac.uk/4669/

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