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Productivity and management practices (Bloom, Sadun & Van Reenen) Ways in which management could matter Key part of “intangible capital” accounting for.

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Presentation on theme: "Productivity and management practices (Bloom, Sadun & Van Reenen) Ways in which management could matter Key part of “intangible capital” accounting for."— Presentation transcript:

1 Productivity and management practices (Bloom, Sadun & Van Reenen) Ways in which management could matter Key part of “intangible capital” accounting for some of TFP variation Large unexplained component in TFP (between and within countries) related to management practices Big differences in management, closely related to TFP They help account for large fraction of TFP gaps (~30%) Some systematic causes of management spreads: competition, labor regulation, FDI, ownership/governance, skills, information

2 Simple production function framework where value added Y is produced as follows: Y = F(A,L,K,M) where A is an efficiency term, labor is L, non- management capital is K, and M is management capital M is measured by means of a survey on management practices involving thousands of managers from nearly 40 countries (World Management Survey) http://www.worldmanagementsurvey.com

3 AVERAGE MANAGEMENT SCORES BY COUNTRY

4 Average management scores across countries are strongly correlated with GDP per capita

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6 Fraction of country TFP Gaps accounted for by management Source: Management as a Technology by Bloom, Sadun and van Reenen (2015)


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