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Article | Annual Review of Economics

Recent Advances in the Empirics of Organizational Economics

by Nicholas Bloom, Raffaella Sadun and John Van Reenen

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Abstract

We present a survey of recent contributions in empirical organizational economics, focusing on management practices and decentralization. Productivity dispersion between firms and countries has motivated the improved measurement of firm organization across industries and countries. There appears to be substantial variation in management practices and decentralization not only between countries, but also especially within countries. Much of the poorer average management quality in countries like Brazil and India seems to result from a long tail of poorly managed firms, which barely exist in the United States. Some stylized facts include the following: (1) competition seems to foster improved management and decentralization; (2) larger firms, skill-intensive plants, and foreign multinationals appear better managed and are more decentralized; (3) firms that are both family owned and managed appear to have worse management and are more centralized; and (4) firms facing an environment of lighter labor market regulations and more human capital specialize relatively more in people management. There is evidence for complementarities between information and communication technology, decentralization, and management, but the relationship is complex, and identification of the productivity effects of organizational practices remains a challenge for future research.

Keywords: Economics; Management Practices and Processes; Performance Productivity; Geographic Location; Motivation and Incentives; Factories, Labs, and Plants; Competition; Human Capital; Markets; Governing Rules, Regulations, and Reforms; Multinational Firms and Management; India; Brazil; United States;

Format: Print 33 pages Find at Harvard Read Now

Citation:

Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. "Recent Advances in the Empirics of Organizational Economics." Annual Review of Economics 2 (2010): 105–137.

About the Author

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Raffaella Sadun
Thomas S. Murphy Associate Professor of Business Administration
Strategy

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More from the Author

  • Working Paper | HBS Working Paper Series | 2018

    The Impact of CEOs in the Public Sector: Evidence from the English NHS

    Katharina Janke, Carol Propper and Raffaella Sadun

    We investigate whether top managers affect the performance of large public sector organizations. As our case study we examine CEOs of English public hospitals, which are large, complex organizations with multi-million turnover. We study the impact of individual CEOs on a wide set of measures of hospital performance, intermediate operational outcomes and inputs. We adopt two econometric approaches: a parametric approach that exploits the movement of CEOs across different hospitals and a non-parametric difference-in-difference matching estimator. Overall, we find little evidence that individual CEOs have an impact on a large set of measures of hospital performance. This result is not due to the allocation of good performers to poorly performing hospitals.

    Keywords: Management; Performance; Public Sector; Measurement and Metrics; Health Industry;

    Citation:

    Janke, Katharina, Carol Propper, and Raffaella Sadun. "The Impact of CEOs in the Public Sector: Evidence from the English NHS." Harvard Business School Working Paper, No. 18-075, March 2018.  View Details
    CiteView Details Read Now Related
  • Module Note | March 2018

    Corporate Strategy: Organization

    Raffaella Sadun

    Citation:

    Sadun, Raffaella. "Corporate Strategy: Organization." Harvard Business School Module Note 718-462, March 2018.  View Details
    CiteView DetailsPurchase Related
  • Teaching Note | HBS Case Collection | March 2018 (Revised March 2018)

    Weathering the Storm at NYU Langone Medical Center

    Raffaella Sadun and Greta Friar

    Teaching Note for HBS No. 616-026.

    Citation:

    Sadun, Raffaella, and Greta Friar. "Weathering the Storm at NYU Langone Medical Center." Harvard Business School Teaching Note 718-506, March 2018. (Revised March 2018.)  View Details
    CiteView DetailsPurchase Related
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