Managerial Ability and Capital Flows

39 Pages Posted: 1 May 2007 Last revised: 22 Jan 2009

See all articles by Andre C. Silva

Andre C. Silva

Nova School of Business and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2008

Abstract

Capital flows with low intensity and flows to middle-income countries. Physical and human capital alone cannot explain this pattern. I present a model to show how managerial ability---the ability to run risky projects---can increase total factor productivity and explain the pattern of capital flows. The model implies that countries with more high-ability managers use more risky projects and have higher productivity. I define proxies for managerial ability with data on physical and human capital, schooling, and entrepreneurship. Consistent with the pattern of capital flows, the model predicts similar returns to capital across countries and higher returns in middle-income countries.

Keywords: capital flows, managerial ability, human capital, entrepreneurs

JEL Classification: F2, F4, L26, O1

Suggested Citation

Silva, Andre C., Managerial Ability and Capital Flows (December 1, 2008). Available at SSRN: https://ssrn.com/abstract=983509 or http://dx.doi.org/10.2139/ssrn.983509

Andre C. Silva (Contact Author)

Nova School of Business and Economics ( email )

Campus de Carcavelos
Carcavelos, 2775-405
Portugal

HOME PAGE: http://sites.google.com/view/andredecastrosilva

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
109
Abstract Views
686
rank
271,847
PlumX Metrics