What Drives Differences in Management Practices?
Name
aer.20170491.pdf
Description
Published version
Size
1.17 MB
Format
Adobe PDF
Checksum (MD5)
85440ce84d98d715dc5d9ae02a0a5d52
Author(s)
Bloom, Nicholas
Brynjolfsson, Erik
Foster, Lucia
Jarmin, Ron
Patnaik, Megha
Saporta-Eksten, Itay
Van Reenen, John
Date Issued
2019
Journal
American Economic Review
Publisher
American Economic Association
Version
Final published version
Abstract
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.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/AER.20170491
