Luca Coraggio, Marco Pagano, Annalisa Scognamiglio, Joacim Tåg, 09 May 2022

Recent research has highlighted the contribution that managerial decisions make to firms’ productivity. This column uses a novel measure of job-worker allocation quality to document how firms that match their employees to their most suitable jobs are more productive, and their ability to do so depends on the quality and experience of their management. The measure is helpful for uncovering a hitherto neglected dimension of managerial practices, and could be particularly valuable at times when the need to cope with technological innovation, pandemics, climate change, or wars requires widespread firm restructuring and workers’ reallocation.

Nicholas Bloom, Leonardo Iacovone, Mariana Pereira-López, John Van Reenen, 25 February 2022

The implications of poor management in developing countries are becoming well known, but what drives these differences is less clear. Based on large new surveys in Mexico and the US, this column argues that misallocation is a key driver of these differences. Frictions from low competition and weak rule of law appear to lie behind the difficulties even well-managed firms in Mexico have in growing, especially in the services sector. These results point to the importance of open and contestable markets, improving contract enforcement, and lowering crime and corruption as key mechanisms to improve firms' management and productivity.

Raffaella Sadun, 12 October 2016

Can productivity gaps be explained by differences in management? In this video, Raffaella Sadun presents her research in management and the differences between being a micro-manager and a coordinator. This video was recorded during the European Economic Association's Congress held in Geneva at the end of August 2016.

David McKenzie, Christopher Woodruff, 21 September 2015

Better management practices are associated with better firm performance, and the quality of management practices is also associated with per capita income. This column explores the effect of business practices on small firms in developing countries. The findings indicate that better business practices are correlated with higher productivity, higher firm profits, and higher rates of survival. Poor business practices are holding back small firms in developing countries.

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