The international empirics of management

Daniela Scur, Scott W. Ohlmacher, John van Reenen, Morten Bennedsend, Nicholas Bloom, M. Ali Choudhary, Lucia Foster, Jesse Groenewegen, Arti Grover, Sjoerd Hardemanh, Leonardo Iacovone, Ryo Kambayashi (), Marie-Christine Laible, Renata Lemos, Hongbin Li, Andrea Linarello, Mika Maliranta, Denis Medvedevi, Charlotte Mengo, John Miles Touya, Natalia Mandirola, Roope Ohlsbom, Atsushi Ohyamas, Megha Patnaik, Mariana Pereira-López, Raffaella Sadun, Tatsuro Senga, Franklin Qian and Florian Zimmermann

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: A country’s national income broadly depends on the quantity and quality of workers and capital. But how well these factors are managed within and between firms may be a key determinant of a country’s productivity and its GDP. Although social scientists have long studied the role of management practices in shaping business performance, their primary tool has been individual case studies. While useful for theory-building, such qualitative work is hard to scale and quantify. We present a large, scalable dataset measuring structured management practices at the business level across multiple countries. We measure practices related to performance monitoring, target-setting, and human resources. We document a set of key stylized facts, which we label “the international empirics of management”. In all countries, firms with more structured practices tend to also have superior economic performance: they are larger in scale, are more profitable, have higher labor productivity and are more likely to export. This consistency was not obvious ex-ante, and being able to quantify these relationships is valuable. We also document significant variation in practices across and within countries, which is important in explaining differences in the wealth of nations. The positive relationship between firm size and structured management practices is stronger in countries with more open and free markets, suggesting that stronger competition may allow firms with more structured management practices to grow larger, thereby potentially raising aggregate national income.

Keywords: management practices; productivity; firm performance; misallocation (search for similar items in EconPapers)
JEL-codes: J1 J50 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2024-11-05
New Economics Papers: this item is included in nep-bec, nep-eff and nep-hrm
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Published in Proceedings of the National Academy of Sciences of the United States of America, 5, November, 2024, 121(45). ISSN: 0027-8424

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Journal Article: The international empirics of management (2024)
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