Working Paper: NBER ID: w15618
Authors: Casey Ichniowski; Kathryn L. Shaw
Abstract: This paper describes an approach for conducting empirical research into three interrelated questions that are fundamental to the field of organizational economics: \n1.\tWhy do firms in the same industry adopt different management practices? \n2.\tDoes the adoption of a new management practice raise productivity? \n3.\tIf so, why does the new management practice raise productivity? \nThis research approach, which we term insider econometrics, addresses these questions by combining insights from industry insiders with rigorous econometric tests about the adoption and productivity effects of new management practices using rich industry-specific data. Understanding the selectivity in the adoption and coverage of different management practices within a single industry is central to this empirical research methodology. The paper considers a number of studies to illustrate persuasive features of insider econometric research and summarizes a number of themes emerging from this line of research.
Keywords: management practices; productivity; insider econometrics
JEL Codes: D2; J01; L2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Adoption of new management practices (O31) | Productivity within firms (D22) |
| Management practices fostering teamwork and communication (M54) | Higher productivity due to enhanced worker interactions (O49) |
| Anticipated productivity gains (O49) | Adoption of specific management practices (Q16) |
| Characteristics of workers and production process (L23) | Anticipated productivity gains (O49) |
| Management practices (M54) | Productivity varies among different workers and workgroups (J29) |