Convergence to the Managerial Frontier
Using detailed survey data on management practices, this paper uses recent advances in unconditional quantile analysis to study the changes in the within country distribution of management quality associated with country convergence to the manageri...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/03/19305148/convergence-managerial-frontier http://hdl.handle.net/10986/17736 |
| Summary: | Using detailed survey data on management
practices, this paper uses recent advances in unconditional
quantile analysis to study the changes in the within country
distribution of management quality associated with country
convergence to the managerial frontier. It then decomposes
the contribution of potential explanatory factors to the
distributional changes. The United States emerges as the
frontier country, not because of better management on
average, but because its best firms are far better than
those of its close competitors. Part of the process of
convergence to the frontier across the development process
represents a trimming of the left tail, much is movement of
the central mass and, for rich countries, it is actually the
best firms that lag the frontier benchmark. Among
potential explanatory variables that may drive convergence,
ownership and human capital appear critical, the former
especially for poorer countries and that latter for richer
countries suggesting that the mechanics of convergence
change across the process. These variables lose their
explanatory power as firm and average country management
quality rises. Hence, once in the advanced country range,
the factors that improve management quality are less easy to
document and hence influence. |
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