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Cited by 502Economic Growth and ProductivityFirm Innovation and GrowthGlobal trade and economics

What Drives Differences in Management Practices?

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Bloom, Nicholas, Brynjolfsson, Erik, Foster, Lucia, Jarmin, Ron, Patnaik, Megha, Saporta-Eksten, Itay, Van Reenen, John·2019·American Economic Review
DOI 10.1257/aer.20170491
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Abstract

Partnering with the US Census Bureau, we implement a new survey of “structured” management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We find an enormous dispersion of management practices across plants, with 40 percent of this variation across plants within the same firm. Management practices account for more than 20 percent of the variation in productivity, a similar, or greater, percentage as that accounted for by R&D, ICT, or human capital. We find evidence of two key drivers to improve management. The business environment, as measured by right-to-work laws, boosts incentive management practices. Learning spillovers, as measured by the arrival of large “Million Dollar Plants” in the county, increases the management scores of incumbents. (JEL D22, D24, L25, L60, M11, M50)

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Authors
Bloom, N., Brynjolfsson, E., Foster, L., Jarmin, R., Patnaik, M., Saporta-Eksten, I., & Van Reenen, J.
Affiliations
  • National Bureau of Economic Research (US)
  • Massachusetts Institute of Technology (US)
  • United States Census Bureau (US)
  • Indian Statistical Institute (IN)
  • The Eitan Berglas School of Economics, Tel Aviv University, P.O.B 39040, Ramat Aviv, Tel Aviv 6997801, Israel, and University College London (email: )
  • Department of Economics and Sloan School of Management, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA 02139, CEP, and NBER)
ORCID
Venue
American Economic Review
Publisher
American Economic Association
Published
2019-05-01
Volume
109
Issue
5
Pages
1648-1683
ISSN
0002-8282 (ISSN-L)
DOI
10.1257/aer.20170491
OpenAlex
W2810763564
Cited by
502
References
54
Citations by year
2026: 76 · 2025: 61 · 2024: 67 · 2023: 96 · 2022: 54 · 2021: 61 · 2020: 46 · 2019: 32 · 2018: 5 · 2017: 3 · 2016: 1
FWCI
60.16
Type
journal article
Language
en
Open access
Locations
  • American Economic Review (publishedVersion)
  • London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
  • London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (submittedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • DSpace@MIT (Massachusetts Institute of Technology) (submittedVersion, cc-by-nc)
  • UCL Discovery (University College London) (submittedVersion)
  • IRIS - Institutional Research Information System (Libera Università Internazionale degli Studi Sociali Guido Carli) (submittedVersion, cc-by-nc-nd)
Funders
  • National Science Foundation
  • Ewing Marion Kauffman Foundation
  • Alfred P. Sloan Foundation
  • Economic and Social Research Council (ES/M010341/1)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Firm Innovation and Growth
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
Keywords
management practices, factories, plant productivity, right-to-work laws, business environment, learning spillovers, incentive management, determinants of productivity

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

What counts as a claim ›How we measure confidence ›How we check this ›

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