Do Externally-Hired Managers Increase Innovation? Evidence from the U.S. Government

Abstract

Although the U.S. government spends nearly $40 billion on intramural research and development, little is known about its own scientists’ innovative output and the managers who are responsible for their performance. Using individual-level data from 2000 to 2013, I investigate the impact of externally-hired federal managers on the innovation output of employees in science, technology, engineering, math, health, and social science occupations. By leveraging the variation in agencies' hiring of external managers, I find positive effects on scientists' number of publications, citations, and outside collaborations following an agency's shift to external management for treated scientists compared to matched controls. In addition, the impact varies for scientists in different occupational fields and is particularly large and positive for citations of shorter-tenured scientists and for outside collaborations of longer-tenured scientists. All together, these findings could inform strategies for hiring public managers and their potential influences on the scientific and technological progress of their organizations.