Abstract
A large body of researches in recent years resulted in the growth of knowledge about better or worse management practices. However, comparative research using firm-level data has been limited by the different styles on management and by the unavailability of homogeneous data sources, especially in former transition and Asian countries. This study fills this gap, by using the firm-level survey by EBRD and World Bank (BEEPS V-MENA ES, 2012-2014) and by looking at the determinants of a Management quality score (MQS) for more than 17.000 firms in 36 countries of Central Asia, Eastern Europe and Northern Africa. We find that both country and firm characteristics matter for managerial skills but the ladder weight differently. In fact, the country-grouping changes, accelerates or dampens the impact of firms’ characteristics on management performance and identifies the channels conducive of better managerial practices. Competition, education, and technology are important channels for the high-income countries only, whereas global value chain participation and ownership are significant channels for the low-income countries only. In particular, GVC participation enhances significantly managerial practices of firms in low-income countries especially for the lower quartile firms. Hence, this study provides empirical support for interplay between country and firm characteristics in transitional and emerging markets. In addition, it provides support for an enhanced connection between business environment reforms devoted to managerial upgrading and industrial policy devoted to enhancing best-performing firms’ characteristics. As such, it suggests that only their complementary and targeted use can support management and business practices upgrading.
Highlights
The origins of cross-country differences in living standards have captured the attention of economists for years, and most researchers agree that at the centre of the variation in output per worker across countries are differences in productivity
This paper relies upon several literatures, organized in three strands across countries: the first considers productivity between and within firms, the second focuses on the drivers of managerial quality, the third looks at managerial incentives and the related training programmes
Researchers have long proposed that managers drive productivity differences (Note 21) but managerial quality as potential driver faced significant measurement problems
Summary
The origins of cross-country differences in living standards have captured the attention of economists for years, and most researchers agree that at the centre of the variation in output per worker across countries are differences in productivity. They surely contribute to understanding why best management practices are not horizontally adopted across countries In this case managerial quality is certainly driven by differences in firm attributes. The country-grouping changes, accelerates or dampens the impact of firms’ characteristics on management performance so that we can better read the effective channels conducive of better managerial practices This is not surprising because firm managerial quality depends upon the spatially - constrained availability of resources devoted to improve business climate, targeting managerial quality. The second set of results is about reading the country-firm interplay as the channels through which the context affects the quality of managerial skill In this case what surprising is the different channel through which the country influences the quality of managerial capital: through participation in global value chain ( GVC) and ownership in less-advanced countries, through the degree of competition, education and technology in high-income countries? Appendices are devoted to full data description, management score measurement and results related to the interaction model
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