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Economic Adjustment during the Great Recession: The Role of Managerial Quality

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  • Gilbert Cette
  • Jimmy Lopez
  • Jacques Mairesse
  • Giuseppe Nicoletti

Abstract

This study investigates empirically how managerial practices have affected macroeconomic adjustment during the Great Recession after the 2008 economic crisis. We start by constructing a country*industry balanced panel data over the 2007-2015 period for eighteen industries in ten OECD countries, and complementing it by two indicators: an indicator of management quality at the country level based on the managerial practices categorical scores at firm level from Bloom et al. (2012); and an indicator at the industry level for the shocks stemming from the 2008 economic crisis. We then rely on the local projection method pioneered by Jordá (2005) to estimate the direct impacts of country management quality indicators and industry economic shocks as well as their joint impacts, on five variables of interest: value-added, employment, labor productivity, wage per employee and labor share during the Great Recession. We find that, in countries where management quality is higher, production and employment are more resilient during the Great Recession, with less production losses and employment damages, no effects on productivity, wage moderation and a slight increase in the labor shares. It appears, moreover, that this resilience is increasing with the size of industry shocks.

Suggested Citation

  • Gilbert Cette & Jimmy Lopez & Jacques Mairesse & Giuseppe Nicoletti, 2020. "Economic Adjustment during the Great Recession: The Role of Managerial Quality," NBER Working Papers 27954, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:27954
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    References listed on IDEAS

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    Cited by:

    1. Cirera,Xavier & Vargas Da Cruz,Marcio Jose & Grover,Arti Goswami & Iacovone,Leonardo & Medvedev,Denis & Pereira Lopez,Mariana De La Paz & Reyes,Santiago, 2021. "Firm Recovery during COVID-19 : Six Stylized Facts," Policy Research Working Paper Series 9810, The World Bank.
    2. C. A. K. Lovell, 2021. "The Pandemic, The Climate, and Productivity," CEPA Working Papers Series WP112021, School of Economics, University of Queensland, Australia.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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