Managers and Productivity in Retail

83 Pages Posted: 4 May 2023 Last revised: 12 May 2023

See all articles by Robert Metcalfe

Robert Metcalfe

University of Southern California

Alexandre Sollaci

International Monetary Fund (IMF)

Chad Syverson

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2023

Abstract

Across many sectors, research has established that management explains a notable portion of productivity differences across organizations. A remaining question, however, is whether it is managers themselves or firm-wide management practices that matter. We shed light on this question by analyzing store-level data from two multibillion-dollar retail companies. In this setting, managers move between stores but management practices are set by firm policy and largely fixed, allowing us to hone in on managers’ personal roles in determining store performance. We find: (i) managers affect and explain a large share of the variance of store-level productivity; (ii) negative assortative matching between managers and stores, which may reflect both firms’ decisions and a selection-driven bias that we characterize and argue might apply in other settings using movers designs; (iii) managers who move do so on average from less productive to more productive stores; (iv) female managers are less likely to move stores than male managers; (v) manager quality is generally hard to explain with the observables in our data, but is correlated with the ratio of full-time to part-time workers; (vi) managers who obtain high labor productivity also tend to obtain high energy productivity, revealing some breadth in managers’ skills applicability; (vii) high-performing managers in stable growth times are also high-performing during turbulent times; and (viii) exogenous productivity shocks improve the quality of initially low quality managers, suggesting managers can learn. We explain implications of these findings for productivity research.

JEL Classification: D20,L2,M5

Suggested Citation

Metcalfe, Robert and Sollaci, Alexandre and Syverson, Chad, Managers and Productivity in Retail (May 1, 2023). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2023-64, Available at SSRN: https://ssrn.com/abstract=4437351 or http://dx.doi.org/10.2139/ssrn.4437351

Robert Metcalfe

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

Alexandre Sollaci

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Chad Syverson (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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