Working Paper: NBER ID: w24249
Authors: Nicholas Bloom; Aprajit Mahajan; David McKenzie; John Roberts
Abstract: Beginning in 2008, we ran a randomized controlled trial that changed management practices in a set of Indian weaving firms (Bloom et al. 2013). In 2017 we revisited the plants and found three main results. First, while about half of the management practices adopted in the original experimental plants had been dropped, there was still a large and significant gap in practices between the treatment and control plants. Likewise, there remained a significant performance gap between treatment and control plants, suggesting lasting impacts of effective management interventions. Second, while few management practices had demonstrably spread across the firms in the study, many had spread within firms, from the experimental plants to the non-experimental plants, suggesting limited spillovers between firms but large spillovers within firms. Third, managerial turnover and the lack of Director time were two of the most cited reasons for the drop in management practices in experimental plants, highlighting the importance of key employees.
Keywords: Management; Interventions; India; Productivity; Firm Performance
JEL Codes: M00; M10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Management interventions (D78) | Firm performance (L25) |
| Management stability (M54) | Practice retention (D14) |
| Management interventions (D78) | Additional consulting services (L84) |
| Management interventions (D78) | Improved marketing practices (M31) |
| Successful practices (Y80) | Broader organizational behavior (L29) |