Import Competition, Heterogeneous Preferences of Managers, and Productivity

No 25539, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While this hypothesis has received ample theoretical attention, empirical evidence is scarce, mainly because preferences of managers are typically unobserved. In this paper, we exploit the fact that a large literature has documented specific non-monetary preferences of family managers. Using Spanish firm-level data, we compare how family-managed and professionally-managed firms react to import competition shocks. We find that import competition leads to productivity increases in family-managed firms that are initially unproductive. Productivity improvements are driven by family management as opposed to family ownership or non-managing family members. Furthermore, we show that these managers increase efficiency by reducing material usage, which is consistent with them trying to increase their short-term cash flow in order to survive. Finally, productivity improvements seem to be particularly pronounced in multi-generational family firms.

JEL-codes: F13 F14 F61 O31 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-bec and nep-int
Note: ITI PR
References: Add references at CitEc
Citations: View citations in EconPapers (27)

Published as Cheng Chen & Claudia Steinwender, 2021. "Import competition, heterogeneous preferences of managers, and productivity," Journal of International Economics, vol 133.

Downloads: (external link)
http://www.nber.org/papers/w25539.pdf (application/pdf)

Related works:
Journal Article: Import competition, heterogeneous preferences of managers, and productivity (2021)
Working Paper: Import competition, heterogeneous preferences of managers and productivity (2020)
Working Paper: Import Competition, Heterogeneous Preferences of Managers, and Productivity (2020)
Working Paper: Import competition, heterogeneous preferences of managers and productivity (2020)
Working Paper: Import Competition, Heterogeneous Preferences of Managers, and Productivity (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25539

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25539

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().