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Management and misallocation in Mexico

Author

Listed:
  • Bloom, Nicholas
  • Iacovone, Leonardo
  • Pereira-López, Mariana
  • Van Reenen, John

Abstract

Using comprehensive administrative management surveys from Mexico and the United States, we document large management gaps between the two countries, driven by both lower average management quality among Mexican firms and greater misallocation. Compared with the United States, Mexico displays a weaker link between firm size and management quality, especially in the distorted service sector. The size-management gradient is weakest in smaller markets—services in low-population-density regions and manufacturing in locations farther from the United States. It is also attenuated in areas with weaker institutions, including poor contract enforcement, high crime, corruption, and informality.

Suggested Citation

  • Bloom, Nicholas & Iacovone, Leonardo & Pereira-López, Mariana & Van Reenen, John, 2026. "Management and misallocation in Mexico," LSE Research Online Documents on Economics 138432, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:138432
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    File URL: https://researchonline.lse.ac.uk/id/eprint/138432/
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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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