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Does Competition Raise Productivity Through Improving Management Quality?

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  • John Van Reenen

Abstract

A classic question in industrial organization is whether competition raises productivity and if so, through what mechanism? I discuss recent empirical evidence from both large-scale databases and specific industries which suggests that tougher competition does indeed raise productivity and one of the main mechanisms is through improving management practices. To establish this, I report on new research seeking to quantify management. I relate this to theoretical perspectives on the economics of competition and management, arguing that management should be seen at least in part as a transferable technology. A range of recent econometric studies suggest that (i) competition increases management quality and (ii) improved management quality boosts productivity.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1036.

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Date of creation: Dec 2010
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Handle: RePEc:cep:cepdps:dp1036

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: management; productivity; organization;

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Cited by:
  1. Beerkens, Maarja, 2013. "Facts and fads in academic research management: The effect of management practices on research productivity in Australia," Research Policy, Elsevier, vol. 42(9), pages 1679-1693.
  2. Werner Hölzl, 2012. "Mobility Barriers and the Speed of Market Selection," WIFO Working Papers 437, WIFO.
  3. Antonelli Cristiano & Fassio Claudio, 2012. "Academic knowledge and economic growth: are scientific fields all alike," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201203, University of Turin.

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