Managers and productivity differences

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Managers and Productivity Di¤erencesNezih Guner, Andrii Parkhomenko and Gustavo Ventura March 2015 -PRELIMINARY AbstractWe document that mean earnings of managers grow faster than for non managers over the life cycle for a group of high-income countries. Furthermore, we …nd that the growth of earnings for managers (relative to non managers) is positively correlated with output per worker across these countries. We interpret this evidence through the lens of an equilibrium span-of-control model where managers invest in their skills. Central to our analysis is a complementarity between skills and investments in the production of new managerial skills that ampli…es initial di¤erences in skills over the life cycle. We discipline model parameters with observations on managerial earnings and the size-distribution of plants in the United States, and then use our framework to quantify the importance of (i) lower exogenous productivity di¤erences, and (ii) the size-dependent distortions emphasized in recent literature. Our …ndings show that both of these factors reduce managerial investments and lead to a lower earnings growth of managers relative to non managers. We also specialize the framework to evaluate the relative contribution of exogenous productivity versus size-dependent distortions for output and plant-size di¤erences between the U.S. and Japan. Our results show that exogenous productivity di¤erences account for about 80% of the output gap between these two countries. Size-dependent distortions are responsible for nearly all di¤erences in plant size.

Technology, Policy Distortions, and the Rise of Large Farms

“…(), Garcia‐Santana and Pijoan‐Mas (), Midrigan and Xu (), Guner et al. (), and Bento and Restuccia (). The common finding from these papers is that plant‐level distortions, especially when they correlate with plant size, could lead to sizable losses in aggregate productivity.…”

Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries

“…environment and firms' endogenous growth incentives. Guner et al (2015) and Roys and Seshadri (2014) present recent dynamic models of (managerial) human capital accumulation and economic development, but do not focus on the implications of creative destruction for the resulting process of selection and firm dynamics. Finally, there is a large literature on management and the hierarchical structure of the internal organization of the firm; see Garicano and Rossi-Hansberg (2015) for a survey.…”

Management as a Technology?

“…First, there is a large body of empirical literature on the importance of management for variations in firm and national productivity, going back to Walker (1887) through to more recent papers like Ichniowski et al (1997), Bertrand and Schoar (2003), Adhvaryu, Kala and Nyshadham (2016) and Bruhn, Karlan and Schoar (2016). Second, there is a growing macro literature on aggregate implications of firm management and organizational structure, ranging from Lucas (1978), to Gennaioli et al (2013), Guner andVentura (2014), Garicano andRossi-Hansberg (2015) and Akcigit, Alp and Peters (2016). Finally, there is another growing literature focusing on explaining cross-country TFP in terms of the degree of reallocation out inputs to more productivity firms, most notably Hsieh and Klenow (2009) and Restuccia and Rogerson (2008).…”