Management Practices and Resilience to Shocks: Evidence from COVID-19

44 Pages Posted: 31 Mar 2021

See all articles by Andrea Lamorgese

Andrea Lamorgese

Bank of Italy - Research Department

Andrea Linarello

Bank of Italy

Megha Patnaik

Stanford University

Fabiano Schivardi

Luiss Guido Carli - Department of Economics and Finance; Einaudi Institute for Economics and Finance (EIEF); Centre for Economic Policy Research (CEPR)

Date Written: March 1, 2021

Abstract

Do management practices help or harm firms when facing large shocks? Organizational practices can facilitate firms' responses to shocks through structured decision making, but also hinder them by constraining flexibility. We use the spread of COVID-19 in Italy, the first Western country hit by the pandemic, to investigate the role of management practices in responding to a large shock. We find a sizable, positive effect of management practices on firm performance: a one-standard deviation increase in the management score reduces the drop in year-ahead expected sales by 30 percent. Evidence points to the fact that better managed firms were more likely to implement changes in the organization of labor, and in particular to use remote work more intensely.

JEL Classification: D22, D24, L20, L25, M11

Suggested Citation

Lamorgese, Andrea and Linarello, Andrea and Patnaik, Megha and Schivardi, Fabiano, Management Practices and Resilience to Shocks: Evidence from COVID-19 (March 1, 2021). CEPR Discussion Paper No. DP15987, Available at SSRN: https://ssrn.com/abstract=3816875

Andrea Lamorgese (Contact Author)

Bank of Italy - Research Department ( email )

Via Nazionale 91
00184 Roma
Italy

Andrea Linarello

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Megha Patnaik

Stanford University ( email )

Fabiano Schivardi

Luiss Guido Carli - Department of Economics and Finance ( email )

Viale Romania 32
Rome, Rome 00187
Italy

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
318
PlumX Metrics