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What drives differences in management practices?

Author

Listed:
  • 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 practices?," LSE Research Online Documents on Economics 83600, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:83600
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    File URL: http://eprints.lse.ac.uk/83600/
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    References listed on IDEAS

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    1. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
    2. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 536-598, June.
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    Cited by:

    1. repec:wly:iecrev:v:59:y:2018:i:3:p:1015-1034 is not listed on IDEAS
    2. repec:nbr:nberch:14037 is not listed on IDEAS
    3. Nicholas Bloom & Kalina Manova & John Van Reenen & Stephen Teng Sun & Zhihong Yu, 2018. "Managing Trade: Evidence from China and the US," NBER Working Papers 24718, National Bureau of Economic Research, Inc.
    4. Jeremy Greenwood & David Weiss, 2018. "Mining Surplus: Modeling James A. Schmitz'S Link Between Competition And Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(3), pages 1015-1034, August.
    5. repec:spr:gjofsm:v:19:y:2018:i:1:d:10.1007_s40171-018-0184-x is not listed on IDEAS

    More about this item

    Keywords

    management; productivity; competition; learning;

    JEL classification:

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

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