Closing the Productivity Gap with the US: Causes and Consequences of the Productivity Program in Western Europe

Michela Giorcelli

No 31959, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies to what extent the transfer of US managerial technologies to Europe after World War II contributed to closing the gap with US businesses. Between 1952 and 1958, the US government sponsored the Productivity Program, which promoted management training trips for European managers at US firms. Through the analysis of reports compiled by UK, France, Germany, and Italian participating firms, I first document that these companies claimed between 5 and 10% yearly productivity increase thanks to the program. The fact that European businesses were not forced to adopt the American management model, but could adapt it to their firm needs and existing business practices was a key aspect of the program’s success. Second, using data on US and Italian participating firms’ performance I show that Italian firms grew on average 7.8 percent faster than that of US companies in the ten years after the start of the program. Moreover, the distribution of productivity of Italian and US firms became more similar over years, confirming a performance convergence between these companies.

JEL-codes: M5 M50 N64 N73 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-eec, nep-eff, nep-eur and nep-his
Note: DAE
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Published as Michela Giorcelli, 2024. "Closing the productivity gap with the US: Causes and consequences of the productivity program in Western Europe," The Manchester School, vol 92(4), pages 426-442.

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