Managerial Quality and Productivity Dynamics

75 Pages Posted: 22 May 2019 Last revised: 22 Aug 2021

See all articles by Achyuta Adhvaryu

Achyuta Adhvaryu

University of Michigan at Ann Arbor

Anant Nyshadham

Boston College - Department of Economics

Jorge Tamayo

Harvard University - Business School (HBS)

Date Written: May 2019

Abstract

Which managerial skills, traits, and practices matter most for productivity? How does the observability of these features affect how appropriately they are priced into wages? Combining two years of daily, line-level production data from a large Indian garment firm with rich survey data on line managers, we find that several key dimensions of managerial quality, like attention, autonomy, and control, are important for learning-by-doing as well as for overall productivity, but are not commensurately rewarded in pay. Counterfactual simulations of our structural model show large gains from screening potential hires via psychometric measurement and training to improve managerial practices.

Suggested Citation

Adhvaryu, Achyuta and Nyshadham, Anant and Tamayo, Jorge A., Managerial Quality and Productivity Dynamics (May 2019). NBER Working Paper No. w25852, Available at SSRN: https://ssrn.com/abstract=3391005

Achyuta Adhvaryu (Contact Author)

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Anant Nyshadham

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Jorge A. Tamayo

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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