What Drives Differences in Management?

56 Pages Posted: 2 May 2017

See all articles by Nicholas Bloom

Nicholas Bloom

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Erik Brynjolfsson

National Bureau of Economic Research (NBER); Stanford

Lucia Foster

U.S. Census Bureau - Center for Economic Studies

Ron S. Jarmin

U.S. Census Bureau

Megha Patnaik

Stanford University

Itay Saporta Eksten

Tel Aviv University - Eitan Berglas School of Economics

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)

Multiple version iconThere are 3 versions of this paper

Date Written: April 2017

Abstract

Partnering with the Census we implement a new survey of “structured” management practices in 32,000 US manufacturing plants. We find an enormous dispersion of management practices across plants, with 40% of this variation across plants within the same firm. This management variation accounts for about a fifth of the spread of productivity, a similar fraction as that accounted for by R&D, and twice as much as explained by IT. We find evidence for four “drivers” of management: competition, business environment, learning spillovers and human capital. Collectively, these drivers account for about a third of the dispersion of structured management practices.

Keywords: Competition, learning, Management, productivity

JEL Classification: L2, M2, O32, O33

Suggested Citation

Bloom, Nicholas and Brynjolfsson, Erik and Foster, Lucia and Jarmin, Ron S. and Patnaik, Megha and Saporta Eksten, Itay and Van Reenen, John Michael and Van Reenen, John Michael, What Drives Differences in Management? (April 2017). CEPR Discussion Paper No. DP11995, Available at SSRN: https://ssrn.com/abstract=2961756

Nicholas Bloom (Contact Author)

Stanford University - Department of Economics ( email )

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Erik Brynjolfsson

National Bureau of Economic Research (NBER) ( email )

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Stanford ( email )

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HOME PAGE: http://brynjolfsson.com

Lucia Foster

U.S. Census Bureau - Center for Economic Studies ( email )

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Ron S. Jarmin

U.S. Census Bureau ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Megha Patnaik

Stanford University ( email )

Itay Saporta Eksten

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

HOME PAGE: http://www.tau.ac.il/~itaysap/

John Michael Van Reenen

London School of Economics - Centre for Economic Performance (CEP) ( email )

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Stanford Graduate School of Business ( email )

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Centre for Economic Policy Research (CEPR)

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