IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/117989.html
   My bibliography  Save this paper

Managerial input and firm performance. Evidence from a policy experiment

Author

Listed:
  • Manaresi, Francesco
  • Palma, Alessandro
  • Salvatici, Luca
  • Scrutinio, Vincenzo

Abstract

We study the effects of a subsidy program designed to boost small and medium enterprises' export capabilities through a Temporary Export Manager (TEM), hired for at least 6 months to provide consulting on how to reach foreign markets. Firms applied online for the subsidy and vouchers to hire TEMs were allocated on a first-come, first-served basis. We use a difference-in-differences design to compare the performances of firms that nearly got the subsidy with those that barely did not. Eligible firms experienced a large increase in revenues, return on equity, profits and value added per employee, accompanied by a significant growth in export in extra-EU markets four years after receiving the subsidy. The gains were larger for the least productive and smaller firms and effects were heterogeneous across TEM providers. TEMs were also effective in stimulating 'good' labor demand: besides intensifying exports, firms increased their workforce by nearly 13%, mainly in full-time and permanent employees. Results of a survey conducted on TEM providers confirm our econometric results and revealed that the benefits of voucher extended beyond the initial subsidized service.

Suggested Citation

  • Manaresi, Francesco & Palma, Alessandro & Salvatici, Luca & Scrutinio, Vincenzo, 2022. "Managerial input and firm performance. Evidence from a policy experiment," LSE Research Online Documents on Economics 117989, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:117989
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/117989/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. João Amador & Sharmin Sazedj & José Tavares, 2018. "CEO Performance in Severe Crises: The Role of Newcomers," Working Papers w201821, Banco de Portugal, Economics and Research Department.
    2. Holger Görg & Michael Henry & Eric Strobl, 2008. "Grant Support and Exporting Activity," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 168-174, February.
    3. Paolo Pinotti, 2017. "Clicking on Heaven's Door: The Effect of Immigrant Legalization on Crime," American Economic Review, American Economic Association, vol. 107(1), pages 138-168, January.
    4. Edward P. Lazear & Kathryn L. Shaw, 2007. "Personnel Economics: The Economist's View of Human Resources," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 91-114, Fall.
    5. Lorenzo Caliendo & Giordano Mion & Luca David Opromolla & Esteban Rossi-Hansberg, 2020. "Productivity and Organization in Portuguese Firms," Journal of Political Economy, University of Chicago Press, vol. 128(11), pages 4211-4257.
    6. Henrik Kleven & Camille Landais & Jakob Egholt Søgaard, 2019. "Children and Gender Inequality: Evidence from Denmark," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 181-209, October.
    7. Miriam Bruhn & Dean Karlan & Antoinette Schoar, 2018. "The Impact of Consulting Services on Small and Medium Enterprises: Evidence from a Randomized Trial in Mexico," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 635-687.
    8. Mion, Giordano & Opromolla, Luca David, 2014. "Managers' mobility, trade performance, and wages," Journal of International Economics, Elsevier, vol. 94(1), pages 85-101.
    9. Defever, Fabrice & Reyes, José-Daniel & Riaño, Alejandro & Varela, Gonzalo, 2020. "All these worlds are yours, except india: The effectiveness of cash subsidies to export in nepal," European Economic Review, Elsevier, vol. 128(C).
    10. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    11. Demidova, Svetlana & Rodríguez-Clare, Andrés, 2009. "Trade policy under firm-level heterogeneity in a small economy," Journal of International Economics, Elsevier, vol. 78(1), pages 100-112, June.
    12. Gabriel J. Felbermayr & Erdal Yalcin, 2013. "Export Credit Guarantees and Export Performance: An Empirical Analysis for Germany," The World Economy, Wiley Blackwell, vol. 36(8), pages 967-999, August.
    13. Nicholas Bloom & Benn Eifert & Aprajit Mahajan & David McKenzie & John Roberts, 2013. "Does Management Matter? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 1-51.
    14. Stefan Bender & Nicholas Bloom & David Card & John Van Reenen & Stefanie Wolter, 2018. "Management Practices, Workforce Selection, and Productivity," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 371-409.
    15. László Halpern & Miklós Koren & Adam Szeidl, 2015. "Imported Inputs and Productivity," American Economic Review, American Economic Association, vol. 105(12), pages 3660-3703, December.
    16. Stephen J. Anderson & David McKenzie, 2022. "Improving Business Practices and the Boundary of the Entrepreneur: A Randomized Experiment Comparing Training, Consulting, Insourcing, and Outsourcing," Journal of Political Economy, University of Chicago Press, vol. 130(1), pages 157-209.
    17. Michela Giorcelli, 2019. "The Long-Term Effects of Management and Technology Transfers," American Economic Review, American Economic Association, vol. 109(1), pages 121-152, January.
    18. Nicholas Bloom & John Van Reenen, 2010. "Why Do Management Practices Differ across Firms and Countries?," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 203-224, Winter.
    19. Leonardo Iacovone & William Maloney & David McKenzie, 2022. "Improving Management with Individual and Group-Based Consulting: Results from a Randomized Experiment in Colombia [From Proof of Concept to Scaleable Policies: Challenges and Solutions, with an App," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(1), pages 346-371.
    20. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    21. Fabiano Schivardi & Tom Schmitz, 2020. "The IT Revolution and Southern Europe’s Two Lost Decades [Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries]," Journal of the European Economic Association, European Economic Association, vol. 18(5), pages 2441-2486.
    22. Ziran Ding, 2022. "Firm heterogeneity, variable markups, and multinational production: A review from trade policy perspective," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1311-1357, December.
    23. Nicholas Bloom & Kalina Manova & John Van Reenen & Stephen Teng Sun & Zhihong Yu, 2021. "Trade and Management," The Review of Economics and Statistics, MIT Press, vol. 103(3), pages 443-460, July.
    24. Maurice Kugler & Eric Verhoogen, 2009. "Plants and Imported Inputs: New Facts and an Interpretation," American Economic Review, American Economic Association, vol. 99(2), pages 501-507, May.
    25. Mion, Giordano & Opromolla, Luca David & Sforza, Alessandro, 2016. "The Diffusion of Knowledge via Managers' Mobility," CEPR Discussion Papers 11706, C.E.P.R. Discussion Papers.
    26. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
    27. Nicola Bianchi & Michela Giorcelli, 2022. "The Dynamics and Spillovers of Management Interventions: Evidence from the Training within Industry Program," Journal of Political Economy, University of Chicago Press, vol. 130(6), pages 1630-1675.
    28. Jakob Munch & Georg Schaur, 2018. "The Effect of Export Promotion on Firm-Level Performance," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 357-387, February.
    29. Sebastian Calonico & Matias D. Cattaneo & Max H. Farrell & Roc ́ıo Titiunik, 2017. "rdrobust: Software for regression-discontinuity designs," Stata Journal, StataCorp LP, vol. 17(2), pages 372-404, June.
    30. Anderson,Stephen J. & Mckenzie,David J., 2021. "What Prevents More Small Firms from Using Professional Business Services ? An Information and Quality-Rating Experiment in Nigeria," Policy Research Working Paper Series 9614, The World Bank.
    31. Imbens,Guido W. & Rubin,Donald B., 2015. "Causal Inference for Statistics, Social, and Biomedical Sciences," Cambridge Books, Cambridge University Press, number 9780521885881.
    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. Gonzalo Nunez-Chaim & Henry G. Overman & Capucine Riom, 2024. "Does subsidising business advice improve firm performance? Evidence from a large RCT," CEP Discussion Papers dp1977, Centre for Economic Performance, LSE.

    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. Dimitrios Exadactylos & Massimo Riccaboni & Armando Rungi, 2019. "Talents from Abroad. Foreign Managers and Productivity in the United Kingdom," Working Papers 01/2019, IMT School for Advanced Studies Lucca, revised Dec 2019.
    2. Anna Valero, 2021. "Education and management practices," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(2), pages 302-322.
    3. Baltrunaite, Audinga & Bovini, Giulia & Mocetti, Sauro, 2023. "Managerial talent and managerial practices: Are they complements?," Journal of Corporate Finance, Elsevier, vol. 79(C).
    4. Sivropoulos-Valero, Anna Valero, 2021. "Education and management practices," LSE Research Online Documents on Economics 114436, London School of Economics and Political Science, LSE Library.
    5. Anna Valero, 2021. "Education and management practices," POID Working Papers 007, Centre for Economic Performance, LSE.
    6. Defever, F. & Riaño, A. & Varela, G., 2020. "Evaluating the Impact of Export Finance Support On Firm-level Export Performance: Evidence from Pakistan," Working Papers 20/14, Department of Economics, City University London.
    7. Daniela Scur & Raffaella Sadun & John Van Reenen & Renata Lemos & Nicholas Bloom, 2021. "The World Management Survey at 18: lessons and the way forward," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(2), pages 231-258.
    8. Alexandre, Fernando & Cruz, Sara & Portela, Miguel, 2020. "Financial Distress and the Role of Management in Micro and Small-Sized Firms," IZA Discussion Papers 13738, Institute of Labor Economics (IZA).
    9. Audinga Baltrunaite & Sara Formai & Andrea Linarello & Sauro Mocetti, 2022. "Ownership, Governance, Management and Firm Performance: Evidence from Italian Firms," Questioni di Economia e Finanza (Occasional Papers) 678, Bank of Italy, Economic Research and International Relations Area.
    10. Claudia Custodio & Diogo Mendes & Daniel Metzger, 2021. "The impact of financial education of executives on financial practices of medium and large enterprises," NOVAFRICA Working Paper Series wp2105, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    11. Scur, Daniela & Lemos, Renata, 2019. "The ties that bind: implicit contracts and management practices in family-run firms," CEPR Discussion Papers 13794, C.E.P.R. Discussion Papers.
    12. Chakraborty, Pavel & Raveh, Ohad, 2018. "Input-trade liberalization and the demand for managers: Evidence from India," Journal of International Economics, Elsevier, vol. 111(C), pages 159-176.
    13. Bruhn,Miriam & Piza,Caio, 2022. "Missing Information : Why Don’t More Firms Seek Out Business Advice ?," Policy Research Working Paper Series 10183, The World Bank.
    14. Mion, Giordano & Opromolla, Luca David, 2014. "Managers' mobility, trade performance, and wages," Journal of International Economics, Elsevier, vol. 94(1), pages 85-101.
    15. Katarzyna Bilicka & Daniela Scur, 2021. "Organizational capacity and profit shifting," CEP Discussion Papers dp1795, Centre for Economic Performance, LSE.
    16. Defever, Fabrice & Reyes, José-Daniel & Riaño, Alejandro & Varela, Gonzalo, 2020. "All these worlds are yours, except india: The effectiveness of cash subsidies to export in nepal," European Economic Review, Elsevier, vol. 128(C).
    17. Chen, Cheng & Steinwender, Claudia, 2021. "Import competition, heterogeneous preferences of managers, and productivity," Journal of International Economics, Elsevier, vol. 133(C).
    18. Tian, Binbin & Lin, Chao & Zhang, Wenwen & Feng, Chen, 2022. "Tax Incentives, On-the-job Training, and Human Capital Accumulation: Evidence from China," China Economic Review, Elsevier, vol. 75(C).
    19. Abi Adams-Prassl & Kristiina Huttunen & Emily Nix & Ning Zhang, 2022. "Violence Against Women at Work," Opportunity and Inclusive Growth Institute Working Papers 064, Federal Reserve Bank of Minneapolis.
    20. Pisch, Frank & Berlingieri, Giuseppe, 2022. "Managing Export Complexity: The Role of Service Outsourcing," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 135680, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).

    More about this item

    Keywords

    SMEs; export subsidy; labor demand; natural experiment; click-day;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General

    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:ehl:lserod:117989. 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: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.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.