Convergence to the Managerial Frontier

William Maloney and Mauricio Sarrias

No 8272, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using detailed survey data on management practices, this paper uses recent advances in unconditional quantile analysis to study the changes in the within country distribution of management quality associated with country convergence to the managerial frontier. It then decomposes the contribution of potential explanatory factors to the distributional changes. The US emerges as the frontier country, not because of on average better management, but because its best firms are far better than those of its close competitors. Part of the process of convergence to the frontier across the development process represents a trimming of the left tail, much is movement of the central mass and, for rich countries, it is actually the best firms that lag the frontier benchmark. Among potential explanatory variables that may drive convergence, ownership and human capital appear critical, the former especially for poorer countries and that latter for richer suggesting that the mechanics of convergence change across the process. These variables lose their explanatory power as firm and average country management quality rises. Hence, once in the advanced country range, the factors that improve management quality are less easy to document and hence influence.

Keywords: management practices; convergence; development; quantile regression; RIF decomposition (search for similar items in EconPapers)
JEL-codes: C21 L2 M2 O33 O47 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2014-06
New Economics Papers: this item is included in nep-eff and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Convergence to the managerial frontier (2017)
Working Paper: Convergence to the Managerial Frontier (2014)
Working Paper: Convergence to the managerial frontier (2014)
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