IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v77y2010i1p90-126.html
   My bibliography  Save this article

Managerial Skills Acquisition and the Theory of Economic Development

Author

Listed:
  • Paul Beaudry
  • Patrick Francois

Abstract

Why don't all countries converge rapidly to the use of most efficient or best practice technologies? Micro level studies suggest managerial skills play a key role in the adoption of modern technologies. In this paper we model the interactive process between on-the-job managerial skill acquisition and the adoption of modern technology. We use the model to illustrate why some countries develop managerial skills quickly and adopt best practice technologies, while others stay backwards. The model also explains why managers will not migrate from rich countries to poor countries, as would be needed to generate convergence. Finally we show why standard growth accounting exercises will incorrectly attribute a large proportion of managerial skills' contribution to total factor productivity and we quantify the importance of this bias. Copyright , Wiley-Blackwell.

Suggested Citation

  • Paul Beaudry & Patrick Francois, 2010. "Managerial Skills Acquisition and the Theory of Economic Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(1), pages 90-126.
    • Handle: RePEc:oup:restud:v:77:y:2010:i:1:p:90-126
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1467-937X.2009.00571.x
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Benhabib, Jess & Spiegel, Mark M., 2005. "Human Capital and Technology Diffusion," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 13, pages 935-966, Elsevier.
    3. Bessen, James, 2003. "Technology and Learning by Factory Workers: The Stretch-Out at Lowell, 1842," The Journal of Economic History, Cambridge University Press, vol. 63(1), pages 33-64, March.
    4. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2003. "Vertical Integration and Distance to Frontier," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 630-638, 04/05.
    5. Daron Acemoglu & Fabrizio Zilibotti, 2001. "Productivity Differences," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 563-606.
    6. Devarajan, Shantayanan & Easterly, William R & Pack, Howard, 2003. "Low Investment Is Not the Constraint on African Development," Economic Development and Cultural Change, University of Chicago Press, vol. 51(3), pages 547-571, April.
    7. Marcel Fafchampsm & Måns Söderbom, 2006. "Wages and Labor Management in African Manufacturing," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
    8. Irwin, Douglas A & Klenow, Peter J, 1994. "Learning-by-Doing Spillovers in the Semiconductor Industry," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1200-1227, December.
    9. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    10. William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423, December.
    11. Stokey, Nancy L, 1988. "Learning by Doing and the Introduction of New Goods," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 701-717, August.
    12. Acemoglu, Daron & F. Newman, Andrew, 2002. "The labor market and corporate structure," European Economic Review, Elsevier, vol. 46(10), pages 1733-1756, December.
    13. Gregory Mankiw, 1995. "The Growth of Nations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 275-326.
    14. Peter J. Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114, National Bureau of Economic Research, Inc.
    15. Stephen L. Parente & Edward C. Prescott, 2002. "Barriers to Riches," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661306, December.
    16. Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-1165, December.
    17. Feldman, Maryann P, 2001. "The Entrepreneurial Event Revisited: Firm Formation in a Regional Context," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 10(4), pages 861-891, December.
    18. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leone Leonida & Marianna Marra & Sergio Scicchitano & Antonio Giangreco & Marco Biagetti, 2020. "Estimating the Wage Premium to Supervision for Middle Managers in Different Contexts: Evidence from Germany and the UK," Work, Employment & Society, British Sociological Association, vol. 34(6), pages 1004-1026, December.
    2. Sergio Scicchitano, 2014. "The gender wage gap among Spanish managers," International Journal of Manpower, Emerald Group Publishing Limited, vol. 35(3), pages 327-344, May.
    3. Sampson, Thomas, 2013. "Brain drain or brain gain? Technology diffusion and learning on-the-job," Journal of International Economics, Elsevier, vol. 90(1), pages 162-176.
    4. Marco Biagetti & Sergio Scicchitano, 2016. "Are women in supervisory positions more discriminated against? A multinomial approach," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
    5. Kang, Youngho & Kim, Ryoonhee & Whang, Unjung, 2023. "International knowledge transfers and capital structure of multinational affiliates: Evidence from expatriate managers as the transfer agents," Journal of Multinational Financial Management, Elsevier, vol. 68(C).
    6. Dasgupta, Kunal, 2012. "Learning and knowledge diffusion in a global economy," Journal of International Economics, Elsevier, vol. 87(2), pages 323-336.
    7. Leone Leonida & Antonio Giangreco & Sergio Scicchitano & Marco Biagetti, 2023. "Britain and BrExit: Is the UK more attractive to supervisors? An analysis of the wage premium to supervision across the EU," British Journal of Industrial Relations, London School of Economics, vol. 61(2), pages 291-312, June.
    8. Luminita Popescu & Anica Iancu & Marioara Avram & Daniel Avram & Virgil Popescu, 2020. "The Role of Managerial Skills in the Sustainable Development of SMEs in Mehedinti County, Romania," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    9. Erzo G. J. Luttmer, 2014. "An Assignment Model of Knowledge Diffusion and Income Inequality," Working Papers 715, Federal Reserve Bank of Minneapolis.
    10. Alexander Monge-Naranjo, 2012. "Knowledge Spillovers and The Optimal Taxation of Multinational Firms," 2012 Meeting Papers 593, Society for Economic Dynamics.
    11. Shengzhong Huang & Chan Lyu & Xiaojun Lin, 2018. "Is Labor Related to the Duality of Earnings Smoothing?," Sustainability, MDPI, vol. 10(12), pages 1-20, November.
    12. Paul Beaudry & Patrick Francois, 2007. "The Economics of Inefficient Technology Use," NBER Working Papers 13500, National Bureau of Economic Research, Inc.
    13. Sergio Scicchitano, 2015. "Exploring the gender wage gap in the managerial labour market:a counterfactual decomposition analysis," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
    14. Biagetti, Marco & Giangreco, Antonio & Leonida, Leone & Scicchitano, Sergio, 2020. "BrExit or BritaIn: Is the UK more Attractive to Supervisors? An Analysis of Wage Premium to Supervision across the EU," GLO Discussion Paper Series 510, Global Labor Organization (GLO).
    15. Max Gillman, 2019. "A Human Capital Theory of Structural Transformation," CERGE-EI Working Papers wp648, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    16. Braunerhjelm, Pontus & Lappi, Emma, 2023. "Employees' entrepreneurial human capital and firm performance," Research Policy, Elsevier, vol. 52(2).
    17. Chakraborty, Pavel & Chakrabarti, Anindya S. & Chatterjee, Chirantan, 2023. "Cross-border environmental regulation and firm labor demand," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    18. Gillman, Max, 2021. "Steps in industrial development through human capital deepening," Economic Modelling, Elsevier, vol. 99(C).
    19. Alexander Monge-Naranjo, 2012. "Foreign firms and the diffusion of knowledge," Working Papers 2012-055, Federal Reserve Bank of St. Louis.
    20. Alexander Monge-Naranjo, 2016. "Openness and the Optimal Taxation of Foreign Know-How," Working Papers 2016-20, Federal Reserve Bank of St. Louis.
    21. Marco Biagetti & Sergio Scicchitano, 2014. "Estimating the Gender Pay Gap in the Managerial and non Managerial Italian Labor Market," Economics Bulletin, AccessEcon, vol. 34(3), pages 1846-1856.
    22. Catherine Laffineur & Maria Minniti & Benjamin Montmartin, 2023. "Does Knowledge in Management Foster Firm Creation and Performance?," GREDEG Working Papers 2023-19, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thompson, Peter, 2010. "Learning by Doing," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 429-476, Elsevier.
    2. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
    3. Toshihiko Mukoyama, 2003. "A Theory of Technology Diffusion," Macroeconomics 0303010, University Library of Munich, Germany, revised 03 Jun 2003.
    4. Samuel de Abreu Pessôa, 2001. "Um Modelo de Acumulação de Capital Físico e Humano: Um Diálogo Com a Economia do Trabalho," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 035, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170, Elsevier.
    6. Adriana Di Liberto, 2007. "Convergence and Divergence in Neoclassical Growth Models with Human Capital," Economia politica, Società editrice il Mulino, issue 2, pages 289-322.
    7. Maloney, William F. & Valencia Caicedo, Felipe, 2014. "Engineers, Innovative Capacity and Development in the Americas," IZA Discussion Papers 8271, Institute of Labor Economics (IZA).
    8. Klenow, Peter J. & Rodriguez-Clare, Andres, 2005. "Externalities and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 11, pages 817-861, Elsevier.
    9. Antonio Ciccone & Elias Papaioannou, 2009. "Human Capital, the Structure of Production, and Growth," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 66-82, February.
    10. Schiffbauer, Marc, 2006. "Theoretical and methodological study on the role of public policies in fostering innovation and growth," Papers DYNREG04, Economic and Social Research Institute (ESRI).
    11. Tuna Dinç, 2012. "The Two Sector Model of Learning-By Doing and Productivity Differences," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 59(5), pages 583-598, December.
    12. Comin, Diego & Mestieri, Martí, 2014. "Technology Diffusion: Measurement, Causes, and Consequences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 565-622, Elsevier.
    13. Klenow, Peter J. & Rodriguez-Clare, Andres, 1997. "Economic growth: A review essay," Journal of Monetary Economics, Elsevier, vol. 40(3), pages 597-617, December.
    14. Fabio Aricó, 2003. "Growth and Unemployment: Towards a Theoretical Integration," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 419-455, July.
    15. Afonso, Oscar & Leite, Rui, 2010. "Learning-by-doing, technology-adoption costs and wage inequality," Economic Modelling, Elsevier, vol. 27(5), pages 1069-1078, September.
    16. Hübler, Michael & Baumstark, Lavinia & Leimbach, Marian & Edenhofer, Ottmar & Bauer, Nico, 2012. "An integrated assessment model with endogenous growth," Ecological Economics, Elsevier, vol. 83(C), pages 118-131.
    17. Howitt, Peter & Mayer-Foulkes, David, 2005. "R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(1), pages 147-177, February.
    18. William F. Maloney & Felipe Valencia Caicedo, 2017. "Engineering Growth: Innovative Capacity and Development in the Americas," CESifo Working Paper Series 6339, CESifo.
    19. Sang-Yong Tom Lee & Xiao Jia Guo, 2004. "Information and Communications Technology (ICT) and Spillover: A Panel Analysis," Econometric Society 2004 Far Eastern Meetings 722, Econometric Society.
    20. Kosempel, Stephen, 2004. "A theory of development and long run growth," Journal of Development Economics, Elsevier, vol. 75(1), pages 201-220, October.

    More about this item

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:77:y:2010:i:1:p:90-126. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.