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Do well managed firms make better forecasts?

Author

Listed:
  • Bloom, Nicholas
  • Kawakubo, Taka
  • Meng, Charlotte
  • Mizen, Paul
  • Riley, Rebecca
  • Senga, Tatsuro
  • Van Reenen, John

Abstract

We link new forecast and management data on over 20,000 firms to data on productivity in manufacturing and services. The panel survey was administered in the UK in July 2017 and November 2020, coinciding with two periods of considerable uncertainty from Brexit and Covid. We find that better-managed firms make more accurate forecasts for firm-level turnover and macro-level GDP. Uniquely, we show better-managed firms are also aware that they make more accurate forecasts and have greater confidence in their predictions. This highlights how superior forecasting ability enables well-managed firms to make improved operational and strategic choices.

Suggested Citation

  • Bloom, Nicholas & Kawakubo, Taka & Meng, Charlotte & Mizen, Paul & Riley, Rebecca & Senga, Tatsuro & Van Reenen, John, 2025. "Do well managed firms make better forecasts?," LSE Research Online Documents on Economics 130291, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:130291
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    Keywords

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    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • 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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