This paper examines the long-run causal effects of management on firm performance. Under the United States Technical Assistance and Productivity Program (1952–1958), the United States organized management training trips for Italian managers to US firms and granted technologically advanced machines to Italian companies. I exploit an unexpected budget cut that reduced the number of participating firms and find that, compared to businesses excluded by the budget cut: performance of Italian firms that sent their managers to the United States increased for at least fifteen years after the program; performance of companies that received new machines increased, but flattened out over time; management and new machines were complementary. (JEL F23, L25, M16, M54, N34, N64, O33)

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This paper studies the effects of university STEM education on innovation and labor market outcomes by exploiting a change in enrollment requirements in Italian STEM majors. University-level scientific education had two direct effects on the development of patents by students who had acquired a STEM degree. First, the policy changed the direction of their innovation. Second, it allowed these individuals to reach top positions within firms and be more involved in the innovation process. STEM degrees, however, also changed occupational sorting. Some higher-achieving individuals used STEM degrees to enter jobs that required university-level education, but did not focus on patenting.