1 Department of Economics and Stanford Institute for Economic Policy Research, Stanford University, 579 Serra Mall, Stanford, CA 94305, and NBER (email: ) · 2 MIT Sloan School of Management, 100 Main Street, Cambridge, MA 02142, and NBER (email: ) · 3 Center for Economic Studies, US Census Bureau, 4600 Silver Hill Road, Suitland, MD 20746 (email: ) · 4 US Census Bureau, 4600 Silver Hill Road, Suitland, MD 20746 (email: ) · 5 Economics and Planning Unit, Indian Statistical Institute, 7 S.J.S. Marg, New Delhi 110067, India (email: ) · 6 The Eitan Berglas School of Economics, Tel Aviv University, P.O.B 39040, Ramat Aviv, Tel Aviv 6997801, Israel, and University College London (email: ) · 7 Department of Economics and Sloan School of Management, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA 02139, CEP, and NBER)
open access
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.