Industrial organisation

Nicholas Bloom, Erik Brynjolfsson, Lucia Foster, Ron Jarmin, Megha Patnaik, Itay Saporta Eksten, John Van Reenen, 17 May 2017

Disentangling the relationship between management practices and productivity has been hampered by the absence of large sample data across plants and firms. This column exploits a new survey covering US manufacturing to show that management practices vary both among and within companies. Furthermore, management practices are just as important for productivity as a number of other factors associated with successful businesses, such as technology adoption. 

Catherine Casson, Mark Casson, John Lee, Katie Phillips, 07 May 2017

Contemporary businesses are frequently challenged to invest the profits from their commercial successes into projects that benefit society. Yet this is not a new concept – this column reports that it began as early as the medieval period. Profits from property speculation in the Middle Ages were re-invested into local communities. Compassionate capitalism involved high levels of charitable giving to hospitals, monasteries, churches, and colleges, which helped to disseminate the economic benefits of investments from individuals to the wider community. 

Hiroyasu Inoue, Yasuyuki Todo, 25 April 2017

Natural disasters have enormous economic consequences, with the 2011 Great East Japan Earthquake providing a particularly stark recent example. This column uses supply chain data for more than one million Japanese firms to explore how negative shocks from natural disasters propagate through firm networks. Shocks are found to propagate very quickly, due in large part to certain ‘hub’ firms that have a high number of supply chain partners. Production substitution is the key to slowing the propagation.

Jim Tomlinson, 21 April 2017

Many commentators have portrayed Britain’s referendum decision to leave the EU as being motivated by a popular rejection of globalisation. This column argues that in seeking to understand the economic basis of the Brexit vote, we should concentrate not on globalisation but on the long-term impact of de-industrialisation, which has left a legacy of a much more polarised service sector labour market, with large numbers of people condemned to poorly paid and insecure jobs.

Nicholas Crafts, 18 April 2017

Depending on the outcome of negotiations, Brexit potentially changes the rules that govern the use of industrial policy. The UK government has in mind risky policy reforms that appear to be incompatible with EU rules on state aid. This column argues that this is an unheralded downside of a hard Brexit. 

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