Working Paper: NBER ID: w23300
Authors: Nicholas Bloom; Erik Brynjolfsson; Lucia Foster; Ron S. Jarmin; Megha Patnaik; Itay Saportaeksten; John Van Reenen
Abstract: Partnering with the Census we implement a new survey of “structured” management practices in 32,000 US manufacturing plants. We find an enormous dispersion of management practices across plants, with 40% of this variation across plants within the same firm. This management variation accounts for about a fifth of the spread of productivity, a similar fraction as that accounted for by R&D, and twice as much as explained by IT. We find evidence for four “drivers” of management: competition, business environment, learning spillovers and human capital. Collectively, these drivers account for about a third of the dispersion of structured management practices.
Keywords: management practices; productivity; manufacturing; business environment; learning spillovers
JEL Codes: L2; M2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| structured management practices (L23) | productivity (O49) |
| product market competition (L13) | structured management practices (L23) |
| right-to-work laws (J58) | management scores (M54) |
| learning spillovers from large multinational plant entries (F23) | local management practices (M54) |
| proximity to land-grant colleges (I23) | management practices (M54) |