Management in production: from unobserved to observed

Thomas Triebs and Subal Kumbhakar

Journal of Productivity Analysis, 2018, vol. 49, issue 2, No 1, 121 pages

Abstract: Abstract Are productivity estimates good proxies for unobserved management? And, does management affect production in a neutral and monotonic fashion as assumed by these proxies? We use Bloom and Van Reenen’s management data to show that two popular proxies, fixed effects and inefficiency scores, correlate with observed management practices. We find that the correlations are positive but weak. Also, management explains only a fraction of the proxies’ variances. The data rejects the assumptions of neutrality and monotonicity. Last, our results suggest that management has characteristics both of a technology and an input.

Keywords: Management practice; production functions; stochastic frontier analysis; semiparametric models (search for similar items in EconPapers)
JEL-codes: C14 D24 M11 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (10)

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DOI: 10.1007/s11123-018-0526-x

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