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Management in production: from unobserved to observed

Author

Listed:
  • Thomas P. Triebs

    (Loughborough University)

  • Subal C. Kumbhakar

    (State University of New York)

Abstract

Are productivity estimates good proxies for unobserved management? And, does management affect production in a neutral and monotonic fashion as assumed by these proxies? We use Bloom and Van Reenen’s management data to show that two popular proxies, fixed effects and inefficiency scores, correlate with observed management practices. We find that the correlations are positive but weak. Also, management explains only a fraction of the proxies’ variances. The data rejects the assumptions of neutrality and monotonicity. Last, our results suggest that management has characteristics both of a technology and an input.

Suggested Citation

  • Thomas P. Triebs & Subal C. Kumbhakar, 2018. "Management in production: from unobserved to observed," Journal of Productivity Analysis, Springer, vol. 49(2), pages 111-121, June.
    • Handle: RePEc:kap:jproda:v:49:y:2018:i:2:d:10.1007_s11123-018-0526-x
    DOI: 10.1007/s11123-018-0526-x
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Boris E. Bravo‐Ureta & Mario González‐Flores & William Greene & Daniel Solís, 2021. "Technology and Technical Efficiency Change: Evidence from a Difference in Differences Selectivity Corrected Stochastic Production Frontier Model," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 362-385, January.
    2. Alecos Papadopoulos, 2021. "Measuring the effect of management on production: a two-tier stochastic frontier approach," Empirical Economics, Springer, vol. 60(6), pages 3011-3041, June.
    3. Mohammed, Sadick & Abdulai, Awudu, 2021. "Extension Participation and Improved Technology Adoption: Impact on Efficiency and Welfare of Farmers in Ghana," 2021 Conference, August 17-31, 2021, Virtual 315362, International Association of Agricultural Economists.
    4. Shasha Liu & Robin Sickles, 2021. "The agency problem revisited: a structural analysis of managerial productivity and CEO compensation in large US commercial banks," Empirical Economics, Springer, vol. 60(1), pages 391-418, January.
    5. Robin C. Sickles & Kai Sun & Thomas P. Triebs, 2021. "The optimal use of management," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1346-1363, July.
    6. Bopp, Carlos & Jara-Rojas, Roberto & Bravo-Ureta, Boris & Engler, Alejandra, 2022. "Irrigation water use, shadow values and productivity: Evidence from stochastic production frontiers in vineyards," Agricultural Water Management, Elsevier, vol. 271(C).
    7. Ang, Frederic & Kerstens, Pieter Jan, 2020. "A superlative indicator for the Luenberger-Hicks-Moorsteen productivity indicator: Theory and application," European Journal of Operational Research, Elsevier, vol. 285(3), pages 1161-1173.
    8. Cristian Barra & Nazzareno Ruggiero, 2022. "How do dimensions of institutional quality improve Italian regional innovation system efficiency? The Knowledge production function using SFA," Journal of Evolutionary Economics, Springer, vol. 32(2), pages 591-642, April.
    9. Mircea Epure, 2022. "Corporate social responsibility as a signaling technology," Review of Managerial Science, Springer, vol. 16(3), pages 907-930, April.

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    More about this item

    Keywords

    Management practice; production functions; stochastic frontier analysis; semiparametric models;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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