Instrumental Variable Estimates of the Effect of Management Practices on Firm Performance in Korean Firms

Youngho Kang and Jieun Chang

MPRA Paper from University Library of Munich, Germany

Abstract: To empirically examine the unbiased effect of management practice on firm productivity, this paper aims to suggest an instrumental variable approach, which requires less costly method. This study uses three firm-level instrumental variables such as the motivations for organizational reform, empowerment, and IT investment during the organizational reform. For empirical study, we use Korean manufacturing firm-level data that contains information on management score and financial statement. The results of the instrumental variable estimation show that better management practice leads to higher level of firm productivity statistically significantly, while the effect of management practices is statistically insignificant in the ordinary least square estimation.

Keywords: Management practices; Productivity; Organizational reform; Instrumental variable (search for similar items in EconPapers)
JEL-codes: C26 L2 M2 (search for similar items in EconPapers)
Date: 2014-09-04
New Economics Papers: this item is included in nep-bec, nep-cse and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Instrumental Variable Estimates of the Effect of Management Practices on Firm Performance in Korean Firms (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:58834

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