Quality of Management of Firms in Turkey

Abstract

This paper examines the quality of management practices in Turkey and its relation to other firm-level characteristics such as firm performance, competition, and type of ownership. A key finding is that management quality is positively correlated with productivity and quality of jobs across subsectors of manufacturing. But the average score of management quality in Turkey is relatively low compared to peer countries. Factors such as firm size, level of human capital of the workforce, export intensity of the firm, openness to international markets, level of hierarchy in decision making, and degree of managerial autonomy are found to be important determinants of managerial practices in Turkey. Thus, improvements in these dimensions, through relevant policies and incentives, can have a positive effect on the quality of firm management going forward. Such improvements in management practices — particularly in the two dimensions where Turkey scores lowest: monitoring and targeting — can have positive effects on firm performance and lead to increases in the creation of quality jobs.