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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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Keywords: management; productivity; organization;

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Cited by:
  1. Nicholas Bloom & Renata Lemos & Raffaella Sadun & Daniela Scur & John Van Reenen, 2014. "The New Empirical Economics of Management," CEP Occasional Papers 41, Centre for Economic Performance, LSE.
  2. 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.
  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.
  4. Werner Hölzl, 2012. "Mobility Barriers and the Speed of Market Selection," WIFO Working Papers, WIFO 437, WIFO.

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