Discussion Paper Details

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Title: What Drives Differences in Management?

Author(s): Nicholas Bloom, erik Brynjolfsson, Lucia Foster, Ron Jarmin, Megha Patnaik, Itay Saporta-Eksten and John Van Reenen

Publication Date: April 2017

Keyword(s): Competition, learning, Management and productivity

Programme Area(s): Labour Economics

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.

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Bibliographic Reference

Bloom, N, Brynjolfsson, e, Foster, L, Jarmin, R, Patnaik, M, Saporta-Eksten, I and Van Reenen, J. 2017. 'What Drives Differences in Management?'. London, Centre for Economic Policy Research.