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What Drives Differences in Management?

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  • Bloom, Nicholas
  • Brynjolfsson, erik
  • Foster, Lucia
  • Jarmin, Ron
  • Patnaik, Megha
  • Saporta-Eksten, Itay
  • Van Reenen, John

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.

Suggested Citation

  • Bloom, Nicholas & Brynjolfsson, erik & Foster, Lucia & Jarmin, Ron & Patnaik, Megha & Saporta-Eksten, Itay & Van Reenen, John, 2017. "What Drives Differences in Management?," CEPR Discussion Papers 11995, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11995
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    References listed on IDEAS

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    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, number 9780226261942, March.
    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.
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    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.
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    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

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    Cited by:

    1. Mitchell Hoffman & Steven Tadelis, 2018. "People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis," NBER Working Papers 24360, National Bureau of Economic Research, Inc.
    2. Wim Naudé, 2019. "New Technology, Entrepreneurship and the Revival of Manufacturing in Africa: Opportunities for Youth and Women?," Working Papers idrcdpru4ir, University of Cape Town, Development Policy Research Unit.
    3. Bloom, Nick & Manova, Kalina & Teng Sun, Stephen & Van Reenen, John & Yu, Zhihong, 2018. "Managing trade: evidence from China and the US," LSE Research Online Documents on Economics 88703, London School of Economics and Political Science, LSE Library.
    4. Nick Bloom & Kalina B. Manova & John Van Reenen & Stephen Teng Sun & Zhihong Yu, 2018. "Managing Trade: Evidence from China and the US," CESifo Working Paper Series 7113, CESifo.
    5. 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.
    6. 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.
    7. Pierre Lortie, 2019. "Nurturing Global Growth Companies: Time For A New Policy Toolkit," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 12(27), September.
    8. Kirill Borusyak & Xavier Jaravel, 2018. "The Distributional Effects of Trade: Theory and Evidence from the United States," 2018 Meeting Papers 284, Society for Economic Dynamics.
    9. Alex Bryson & John Forth, 2018. "The Impact of Management Practices on SME Performance," National Institute of Economic and Social Research (NIESR) Discussion Papers 488, National Institute of Economic and Social Research.
    10. Michael Barry & Alex Bryson & Rafael Gomez & Bruce Kaufman & Guenther Lomas & Adrian Wilkinson, 2018. "The ''Good Workplace'': The Role of Joint Consultative Committees, Unions and HR policies in Employee Ratings of Workplaces in Britain," DoQSS Working Papers 18-08, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    11. Feng, Andy & Valero, Anna, 2019. "Skill based management: evidence from manufacturing firms," LSE Research Online Documents on Economics 102603, London School of Economics and Political Science, LSE Library.
    12. Emannuel Dhyne & Joep Konings & Joep Konings & Stijn Vanormelingen,, 2018. "IT and productivity: A firm level analysis," Working Paper Research 346, National Bank of Belgium.
    13. Sandra Bernick & Richard Davies & Anna Valero, 2017. "Industry in Britain: an atlas," CentrePiece - The Magazine for Economic Performance 513, Centre for Economic Performance, LSE.
    14. Feng, Andy & Valero, Anna, 2020. "Skill biased management: evidence from manufacturing firms," LSE Research Online Documents on Economics 103094, London School of Economics and Political Science, LSE Library.
    15. Manav Raj & Robert Seamans, 2018. "Artificial Intelligence, Labor, Productivity, and the Need for Firm-Level Data," NBER Chapters, in: The Economics of Artificial Intelligence: An Agenda, pages 553-565, National Bureau of Economic Research, Inc.
    16. Mile Katic & Renu Agarwal, 2018. "The Flexibility Paradox: Achieving Ambidexterity in High-Variety, Low-Volume Manufacturing," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 19(1), pages 69-86, March.
    17. repec:cep:cepisp:05 is not listed on IDEAS
    18. Achyuta Adhvaryu & Anant Nyshadham & Jorge A. Tamayo, 2019. "Managerial Quality and Productivity Dynamics," NBER Working Papers 25852, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Competition; learning; Management; productivity;

    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

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