IDEAS home Printed from https://ideas.repec.org/p/cep/cepdps/dp1470.html
   My bibliography  Save this paper

What Drives Differences in Management?

Author

Listed:
  • Nicholas Bloom
  • Erik Brynjolfsson
  • Lucia Foster
  • Ron Jarmin
  • Megha Patnaik
  • Itay Saporta-Eksten
  • John Van Reenen

Abstract

Partnering with the Census we implement a new survey of "structured" management practices in 32,000 US manufacturing plants. We find an enormous dispersion of management practices across plants, with 40% of this variation across plants within the same firm. This management variation accounts for about a fifth of the spread of productivity, a similar fraction as that accounted for by R&D, and twice as much as explained by IT. We find evidence for four "drivers" of management: competition, business environment, learning spillovers and human capital. Collectively, these drivers account for about a third of the dispersion of structured management practices. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information was disclosed.

Suggested Citation

  • Nicholas Bloom & Erik Brynjolfsson & Lucia Foster & Ron Jarmin & Megha Patnaik & Itay Saporta-Eksten & John Van Reenen, 2017. "What Drives Differences in Management?," CEP Discussion Papers dp1470, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1470
    as

    Download full text from publisher

    File URL: http://cep.lse.ac.uk/pubs/download/dp1470.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 175-212.
    2. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
    3. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
    4. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 536-598, June.
    5. Catherine Buffington & Kenny Herrell & Scott Ohlmacher, 2016. "The Management and Organizational Practices Survey (MOPS): Cognitive Testing," Working Papers 16-53, Center for Economic Studies, U.S. Census Bureau.
    6. Thomas J. Holmes, 1998. "The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 667-705, August.
    7. Richard B. Freeman & Kathryn L. Shaw, 2009. "International Differences in the Business Practices and Productivity of Firms," NBER Books, National Bureau of Economic Research, Inc, number free07-1, June.
    8. Schmalensee, Richard, 1985. "Do Markets Differ Much?," American Economic Review, American Economic Association, vol. 75(3), pages 341-351, June.
    9. Freeman, Richard B. & Shaw, Kathryn L. (ed.), 2009. "International Differences in the Business Practices and Productivity of Firms," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226261942.
    10. Marianne Bertrand, 2004. "From the Invisible Handshake to the Invisible Hand? How Import Competition Changes the Employment Relationship," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 723-766, October.
    11. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    12. Nicholas Bloom & Erik Brynjolfsson & Lucia Foster & Ron Jarmin & Itay Saporta-Eksten & John Van Reenen, 2013. "Management in America," Working Papers 13-01, Center for Economic Studies, U.S. Census Bureau.
    13. Richard B. Freeman & Kathryn L. Shaw, 2009. "Introduction to "International Differences in the Business Practice and Productivity of Firms"," NBER Chapters,in: International Differences in the Business Practices and Productivity of Firms, pages 1-11 National Bureau of Economic Research, Inc.
    14. Catherine Buffington & Lucia Foster & Ron Jarmin & Scott Ohlmacher, 2016. "The Management and Organizational Practices Survey (MOPS): An Overview," Working Papers 16-28, Center for Economic Studies, U.S. Census Bureau.
    15. Linda Argote & Sara L. Beckman & Dennis Epple, 1990. "The Persistence and Transfer of Learning in Industrial Settings," Management Science, INFORMS, vol. 36(2), pages 140-154, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Management vs managerialism
      by chris in Stumbling and Mumbling on 2018-03-07 14:01:42

    Citations

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


    Cited by:

    1. Jeremy Greenwood & David Weiss, 2013. "Mining Surplus: Modeling James A. Schmitz's Link Between Competition and Productivity," Economie d'Avant Garde Research Reports 22, Economie d'Avant Garde.
    2. Sandra Bernick & Richard Davies & Anna Valero, 2017. "Industry in Britain - An Atlas," CEP Special Papers 34, Centre for Economic Performance, LSE.
    3. repec:nbr:nberch:14037 is not listed on IDEAS
    4. Catherine Buffington & Lucia Foster & Ron Jarmin & Scott Ohlmacher, 2016. "The Management and Organizational Practices Survey (MOPS): An Overview," Working Papers 16-28, Center for Economic Studies, U.S. Census Bureau.
    5. Mario BENASSI & Matteo LANDONI & Francesco RENTOCCHINI, 2017. "University Management Practices and Academic Spin-offs," Departmental Working Papers 2017-11, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    6. repec:spr:gjofsm:v:19:y:2018:i:1:d:10.1007_s40171-018-0184-x is not listed on IDEAS

    More about this item

    Keywords

    management; productivity; competition; learning;

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cep:cepdps:dp1470. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.