The international empirics of management

Daniela Scur, Scott Ohlmacher, John van Reenen, Morten Bennedsen, Nicholas Bloom, Ali Choudhary, Lucia Foster, Jesse Groenewegen, Arti Grover, Sjoerd Hardeman, Leonardo Iacovone, Ryo Kambayashi (), Marie-Christine Laible, Renata Lemos, Hongbin Li, Andrea Linarello, Mika Maliranta, Denis Medvedev, Charlotte Meng, John Miles Touya, Natalia Mandirola, Roope Ohlsbom, Atsushi Ohyama, Megha Patnaik, Mariana Pereira-López, Raffaella Sadun, Tatsuro Senga, Franklin Qian and Florian Zimmermann
Additional contact information
Scott Ohlmacher: b Federal Reserve Board of Governors , Washington , DC 20551
Morten Bennedsen: d Department of Economics , University of Copenhagen , Copenhagen 1172 , Denmark
Ali Choudhary: f Loughborough Business School , Loughborough University , Loughborough LE11 3TU , United Kingdom
Jesse Groenewegen: h Utrecht School of Economics , Utrecht University , Utrecht 3584EC , The Netherlands
Sjoerd Hardeman: h Utrecht School of Economics , Utrecht University , Utrecht 3584EC , The Netherlands
Marie-Christine Laible: l Federal Office for Migration and Refugees , Nuremberg 90461 , Germany
Renata Lemos: m Education Global Practice , World Bank Group , Washington , DC 20433
Hongbin Li: n Stanford Center on China’s Economy and Institutions , Stanford University , Stanford , CA 94305
Mika Maliranta: p Labour Institute for Economic Research LABORE , Helsinki FI-00100 , Finland
Charlotte Meng: r School of Business and Management , Queen Mary University of London , London E1 4NS , United Kingdom
John Miles Touya: s Cátedra de Gestión de Alto Desempeño , Universidad Centro Latinoamericano de Economía Humana (CLAEH) , Montevideo 11100 , Uruguay
Natalia Mandirola: t Departament d’Empresa , Facultat d’Economia i Empresa , Universitat de Barcelona , Barcelona 08034 , Spain
Roope Ohlsbom: u Suomen Yrittäjät , Helsinki 00240 , Finland
Megha Patnaik: w Department of Economics and Finance , LUISS Guido Carli , Rome 00197 , Italy
Mariana Pereira-López: i International Finance Corporation , World Bank Group , Washington , DC 20433
Franklin Qian: y Finance Department, Kenan-Flagler Business School , University of North Carolina at Chapel Hill , Chapel Hill , NC 27599
Florian Zimmermann: z Institute for Employment Research , Nuremberg 90478 , Germany

Proceedings of the National Academy of Sciences, 2024, vol. 121, issue 45, e2412205121

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)
Date: 2024
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