The Land that Lean Manufacturing Forgot? Management Practices in Transition Countries
Stanford University - Department of Economics; Stanford Graduate School of Business; London School of Economics - Centre for Economic Performance (CEP); National Bureau of Economic Research (NBER)
European Bank for Reconstruction and Development (EBRD) - Office of the Chief Economist
John Van Reenen
London School of Economics - Centre for Economic Performance (CEP); Stanford Graduate School of Business; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)
NBER Working Paper No. w17231
We have conducted the first survey on management practices in transition countries. We found that Central Asian transition countries, such as Uzbekistan and Kazakhstan, have on average very poor management practices. Their average scores are below emerging countries such as Brazil, China and India. In contrast, the central European transition countries such as Poland and Lithuania operate with management practices that are only moderately worse than those of western European countries such as Germany. Since we find these practices are strongly linked to firm performance, this suggests poor management practices may be impeding the development of Central Asian transition countries. We find that competition, multinational ownership, private ownership and human capital are all strongly correlated with better management. This implies that the continued opening of markets to domestic and foreign competition, privatisation of state-owned firms and increased levels of workforce education should promote better management, and ultimately faster economic growth.
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Date posted: July 24, 2011
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