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Measuring and Explaining Management Practices Across Firms and Countries

  • Nicholas Bloom

    (Stanford, NBER, and Centre for Economic Performance)

  • John Van Reenen

    (London School of Economics, Centre for Economic Performance, NBER, and CEPR)

We use an innovative survey tool to collect management practice data from 732 medium-sized firms in the United States, France, Germany, and the United Kingdom. These measures of managerial practice are strongly associated with firm-level productivity, profitability, Tobin's Q, and survival rates. Management practices also display significant cross-country differences, with U.S. firms on average better managed than European firms, and significant within-country differences, with a long tail of extremely badly managed firms. We find that poor management practices are more prevalent when product market competition is weak and/or when family-owned firms pass management control down to the eldest sons (primogeniture). (c) 2007 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..

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Article provided by MIT Press in its journal Quarterly Journal of Economics.

Volume (Year): 122 (2007)
Issue (Month): 4 (November)
Pages: 1351-1408

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Handle: RePEc:tpr:qjecon:v:122:y:2007:i:4:p:1351-1408
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