The Real Effects of Relational Contracts

Steven Blader, Claudine Gartenberg, Rebecca Henderson and Andrea Prat

American Economic Review, 2015, vol. 105, issue 5, 452-56

Abstract: Does the "soft side" of management matter? Many managers assert that "firm culture" is strongly correlated with productivity, but there are few robust tests of this assertion. In a set of field experiments, we study driver productivity within a large US logistics company that is arguably transitioning from one relational contract to another, while leaving formal practices and incentives unchanged. We find that sites under the new contract are associated with 1/8 percent higher productivity. Our findings suggest that relational contracts have a first-order effect on productivity and that they can be altered over time.

JEL-codes: D24 D86 L92 M12 M14 M54 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.p20151002
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Citations: View citations in EconPapers (9)

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