Working Paper: NBER ID: w31192
Authors: Robert D. Metcalfe; Alexandre B. Sollaci; Chad Syverson
Abstract: Across many sectors, research has established that management explains a notable portion of productivity differences across organizations. A remaining question, however, is whether it is managers themselves or firm-wide management practices that matter. We shed light on this question by analyzing store-level data from two multibillion-dollar retail companies. In this setting, managers move between stores but management practices are set by firm policy and largely fixed, allowing us to hone in on managers’ personal roles in determining store performance. We find: (i) managers affect and explain a large share of the variance of store-level productivity; (ii) negative assortative matching between managers and stores, which may reflect both firms’ decisions and a selection-driven bias that we characterize and argue might apply in other settings using movers designs; (iii) managers who move do so on average from less productive to more productive stores; (iv) female managers are less likely to move stores than male managers; (v) manager quality is generally hard to explain with the observables in our data, but is correlated with the ratio of full-time to part-time workers; (vi) managers who obtain high labor productivity also tend to obtain high energy productivity, revealing some breadth in managers’ skills applicability; (vii) high-performing managers in stable growth times are also high-performing during turbulent times; and (viii) exogenous productivity shocks improve the quality of initially low quality managers, suggesting managers can learn. We explain implications of these findings for productivity research.
Keywords: No keywords provided
JEL Codes: D20; L2; M5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high-performing managers (M54) | low-performing stores (L81) |
| managers changing stores (J62) | move from less productive to more productive locations (J61) |
| female managers (J16) | less likely to transfer between stores compared to male managers (J62) |
| manager quality (M11) | ratio of full-time to part-time workers (J29) |
| manager quality (M11) | energy efficiency (Q41) |
| high-performing managers (M54) | maintain effectiveness during disruptions (L15) |
| disruptions (J63) | negatively impact productivity (F66) |
| higher-quality managers (L15) | mitigate effects of disruptions (H84) |
| manager quality (M11) | store productivity (E23) |
| moving a manager from the 10th to the 90th percentile (J62) | increase in productivity (O49) |