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What Drives Differences in Management?

Listed author(s):
  • Bloom, Nicholas

    ()

    (Stanford University)

  • Brynjolfsson, Erik

    (MIT Sloan School of Management)

  • Foster, Lucia

    ()

    (U.S. Census Bureau)

  • Jarmin, Ron

    ()

    (U.S. Census Bureau)

  • Patnaik, Megha

    ()

    (Stanford University)

  • Saporta-Eksten, Itay

    ()

    (Tel Aviv University)

  • Van Reenen, John

    ()

    (MIT Sloan School of Management)

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.

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File URL: http://ftp.iza.org/dp10724.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10724.

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Length: 55 pages
Date of creation: Apr 2017
Handle: RePEc:iza:izadps:dp10724
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  1. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 175-212.
  2. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
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  4. 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, 06.
  5. Catherine Buffington & Kenny Herrell & Scott Ohlmacher, 2016. "The Management and Organizational Practices Survey (MOPS): Cognitive Testing," Working Papers 16-53, Center for Economic Studies, U.S. Census Bureau.
  6. Thomas J. Holmes, 1998. "The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 667-705, August.
  7. Richard B. Freeman & Kathryn L. Shaw, 2009. "International Differences in the Business Practices and Productivity of Firms," NBER Books, National Bureau of Economic Research, Inc, number free07-1.
  8. Schmalensee, Richard, 1985. "Do Markets Differ Much?," American Economic Review, American Economic Association, vol. 75(3), pages 341-351, June.
  9. Freeman, Richard B. & Shaw, Kathryn L. (ed.), 2009. "International Differences in the Business Practices and Productivity of Firms," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226261942, March.
  10. Marianne Bertrand, 2004. "From the Invisible Handshake to the Invisible Hand? How Import Competition Changes the Employment Relationship," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 723-766, October.
  11. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
  12. Richard B. Freeman & Kathryn L. Shaw, 2009. "Introduction to "International Differences in the Business Practice and Productivity of Firms"," NBER Chapters,in: International Differences in the Business Practices and Productivity of Firms, pages 1-11 National Bureau of Economic Research, Inc.
  13. Catherine Buffington & Lucia Foster & Ron Jarmin & Scott Ohlmacher, 2016. "The Management and Organizational Practices Survey (MOPS): An Overview," Working Papers 16-28, Center for Economic Studies, U.S. Census Bureau.
  14. Linda Argote & Sara L. Beckman & Dennis Epple, 1990. "The Persistence and Transfer of Learning in Industrial Settings," Management Science, INFORMS, vol. 36(2), pages 140-154, February.
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