Of Managers and Management: Evidence From Matched Employer-Employee Data

Content Provider	Semantic Scholar
Author	Bender, Stefan Bloom, Nicholas Card, David Reenen, John Van Wolter, Stefanie
Copyright Year	2015
Abstract	Recent evidence suggests that an important fraction of the large productivity dispersion between firms is due to management practices. Are these management practices solely because of the allocation of talent (especially of senior managers)? Or is there an additional role for the way that successful firms combine these units of human capital more efficiently? We address this question by merging our survey data on management practices in the 2000s with near population employer-employee data from Germany between 1975-2011. We find a strong correlation between our management score and the and the ability of employees (as measured by employee fixed effects in wage equations), especially managerial talent. Looking at job inflows and outflows, we find that well managed firms systematically select the more able employees and de-select the less talented. Controlling for observed and unobserved human capital accounts for between one quarter and one half of the firmlevel relationship between productivity and management practices. Hence, we argue that the impact of management practices on firm performance is more than simply just the ability of individual managers. JEL No. L2, M2, O32, O33.
File Format	PDF HTM / HTML
Alternate Webpage(s)	http://cep.lse.ac.uk/textonly/_new/staff/vanreenen/pdf/2015_11_13_stanford.pdf
Alternate Webpage(s)	https://conference.nber.org/conf_papers/f82576.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article