Management and misallocation in Mexico

Nicholas Bloom, Leonardo Iacovone, Mariana Pereira-López and John Van Reenen

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

Abstract: Using comprehensive administrative management surveys from Mexico and the United States, we document large management gaps between the two countries, driven by both lower average management quality among Mexican firms and greater misallocation. Compared with the United States, Mexico displays a weaker link between firm size and management quality, especially in the distorted service sector. The size-management gradient is weakest in smaller markets—services in low-population-density regions and manufacturing in locations farther from the United States. It is also attenuated in areas with weaker institutions, including poor contract enforcement, high crime, corruption, and informality.

JEL-codes: J1 J50 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2026-04-30
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Published in American Economic Journal: Macroeconomics, 30, April, 2026, 18(2), pp. 429-456. ISSN: 1945-7707

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https://researchonline.lse.ac.uk/id/eprint/138432/ Open access version. (application/pdf)

Related works:
Journal Article: Management and Misallocation in Mexico (2026)
Working Paper: Management and misallocation in Mexico (2022)
Working Paper: Management and misallocation in Mexico (2022)
Working Paper: Management and Misallocation in Mexico (2022)
Working Paper: Management and misallocation in Mexico (2022)
Working Paper: Management and Misallocation in Mexico (2022)
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