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Skill Biased Management: Evidence from Manufacturing Firms

Andy Feng and Anna Valero

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper investigates the link between management practices and workforce skills in manufacturing firms, exploiting geographical variation in the supply of human capital. Skills measures are constructed using newly compiled data on universities and regional labour markets across 19 countries. Consistent with management practices being complementary with skills, we show that firms further away from universities employ fewer skilled workers and are worse managed, even after controlling for a rich set of observables and fixed effects. Analysis using regional skill premia suggests that variation in the price of skill drives these relationships.

Keywords: management practices; human capital; universities; complementarities (search for similar items in EconPapers)
JEL-codes: I23 I26 J24 L2 M2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lma and nep-ure
Date: 2019-01
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