What Drives Differences in Management Practices?

Partnering with the US Census Bureau, we implement a new survey of “structured” management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We find an enormous dispersion of management practices across plants, with 40 percent of this variation across plants within the same fir...

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Bibliographic Details
Published in:The American economic review Vol. 109; no. 5; pp. 1648 - 1683
Main Authors: Bloom, Nicholas, Brynjolfsson, Erik, Foster, Lucia, Jarmin, Ron, Patnaik, Megha, Saporta-Eksten, Itay, Van Reenen, John
Format: Journal Article
Language:English
Published: Nashville American Economic Association 01.05.2019
Subjects:
Censuses
Communications technology
Corporate management
Economic models
Employment policies
Human capital
Industrial plants
Information technology
Management
Productivity
R&D
Research & development
Telecommunications
Workers' rights
United States > US
ISSN:0002-8282, 1944-7981
Online Access:Get full text
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Summary:Partnering with the US Census Bureau, we implement a new survey of “structured” management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We find an enormous dispersion of management practices across plants, with 40 percent of this variation across plants within the same firm. Management practices account for more than 20 percent of the variation in productivity, a similar, or greater, percentage as that accounted for by R&D, ICT, or human capital. We find evidence of two key drivers to improve management. The business environment, as measured by right-to-work laws, boosts incentive management practices. Learning spillovers, as measured by the arrival of large “Million Dollar Plants” in the county, increases the management scores of incumbents.
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ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20170491