Chiara Criscuolo, Peter Gal, Timo Leidecker, Giuseppe Nicoletti, 23 December 2021

Rising dispersion in productivity across firms has focused attention on the drivers of superior performances of a minority of firms at the ‘productivity frontier’ and disappointing performances of the remaining ‘productivity laggards’. This column brings together data from ten countries to explore how differences in productivity outcomes of frontier and laggard firms depend on the composition, diversity, and competencies of their managers and their workers. Overall, this ‘human side’ explains about a third of the observed differences in productivity across firms, more than is accounted for by differences in capital intensity.

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