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Why do management practices differ across firms and countries
| Venue: | Journal of Economic Perspectives |
| Citations: | 84 - 9 self |
BibTeX
@ARTICLE{Bloom_whydo,
author = {Nicholas Bloom and John Van Reenen},
title = {Why do management practices differ across firms and countries},
journal = {Journal of Economic Perspectives},
year = {},
pages = {203--224}
}
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Abstract
Economists have long puzzled over the astounding differences in productivity between firms and countries. For example, looking at disaggregated data on U.S. manufacturing industries, Syverson (2004a) found that plants at the 90th percentile produced four times as much as the plant in the 10th percentile on a per-employee basis. Only half of this difference in labor productivity could be accounted for by differential inputs, such as capital intensity. Syverson looked at industries defined at the four-digit level in the Standard Industrial Classification (SIC) system (now the North American Industry Classification System or NAICS) like “Bakeries and Tortilla Manufacturing ” or “Plastics Product Manufacturing. ” Foster, Haltiwanger, and Syverson (2008) show large differences in total factor productivity even within very homogeneous goods industries such as boxes and block ice. Some of these productivity differences across firms and plants are temporary, but in large part they persist over time. At the country level, Hall and Jones (1999) and Jones and Romer (2009) show how the stark differences in productivity across countries account for a substantial fraction of the differences in average per capita income. Both at the plant level and at the national level, differences in productivity are typically calculated as a residual—that is, productivity is
Keyphrases
management practice homogeneous good industry plastic product manufacturing caput income u.s. manufacturing industry large difference north american industry classification system differential input four-digit level total factor productivity substantial fraction block ice productivity difference capital intensity astounding difference plant level stark difference large part standard industrial classification labor productivity per-employee basis tortilla manufacturing national level country level
