IDEAS home Printed from https://ideas.repec.org/p/ecl/riceco/20-003.html

The Optimal Use of Management

Author

Listed:
  • Sickles, Robin C.

    (Rice U)

  • Sun, Kai

    (Shanghai U)

  • Triebs, Thomas P.

    (Loughborough U)

Abstract

We analyze the management input from the perspective of a shadow cost minimizing firm. With the help of Bloom and Van Reenen (2007)'s management measure we estimate management's shadow price, dual Morishima elasticities of substitution, and relative price eÿciencies vis-a-vis labor and capital. We find that the shadow price of management is about 1.3 million US dollars per survey scale point. Management is a weak complement for labor but a strong complement for capital. Increases in management reduce the relative income share of labor but not capital. Most firms use too little management relative to both labor and capital, but relative use of management improves over time, with the combination of ownership and control, and competition. Our results suggest that management behaves similar to other inputs.

Suggested Citation

  • Sickles, Robin C. & Sun, Kai & Triebs, Thomas P., 2020. "The Optimal Use of Management," Working Papers 20-003, Rice University, Department of Economics.
    • Handle: RePEc:ecl:riceco:20-003
    as

    Download full text from publisher

    File URL: https://economics.rice.edu/file/4916/download?token=HYYQ5_wg
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Alecos Papadopoulos, 2021. "Measuring the effect of management on production: a two-tier stochastic frontier approach," Empirical Economics, Springer, vol. 60(6), pages 3011-3041, June.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

    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:ecl:riceco:20-003. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/dericus.html .

    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.