Journal Article | Economic Journal (Royal Economic Society) | May 2010

Modern Management: Good for the Environment or Just Hot Air?

by Nicholas Bloom, Christos Genakos, Ralf Martin and Raffaella Sadun

Abstract

We use an innovative methodology to measure management practices in over 300 manufacturing firms in the U.K. We then match this management data to production and energy usage information for establishments owned by these firms. We find that establishments in better managed firms are significantly less energy intensive. This effect is quantitatively substantial: going from the 25th to the 75th percentile of management practices is associated with a 17.4% reduction in energy intensity. Better managed firms are also significantly more productive. These results suggest that management practices that are associated with improved productivity are also linked to lower greenhouse gas emissions.

Keywords: Energy Conservation; Management Practices and Processes; Performance Productivity; Environmental Sustainability; Pollution and Pollutants; Manufacturing Industry; United Kingdom;

Citation:

Bloom, Nicholas, Christos Genakos, Ralf Martin, and Raffaella Sadun. "Modern Management: Good for the Environment or Just Hot Air?" Economic Journal (Royal Economic Society) 120, no. 544 (May 2010): 551–572.