Management in Production: From Unobserved to Observed
18 Pages Posted: 10 Jun 2013 Last revised: 12 Jun 2015
Date Written: November 11, 2014
In their seminal paper Bloom and Van Reenen (2007) showed that management practices correlate with firm performance. In many instances empirical researchers do not observe management practices. They usually resort to performance estimates as proxies for management practices. We ask whether two popular proxies – fixed effects and inefficiency scores – correlate with observed management. These proxies assume that management is a technology shifter and that more management is always better. We take advantage of the availability of observed management to investigate how observed management influences the technology using flexible (semiparametric) forms.
Keywords: Management Practice, Production Functions, Stochastic Frontier Analysis
JEL Classification: D24, C14, M11
Suggested Citation: Suggested Citation