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Economic Adjustment during the Great Recession: The Role of Managerial QualityAuthor-Name: Cette Gilbert

Author

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  • Lopez Jimmy
  • Mairesse Jacques
  • Nicoletti Giuseppe
Abstract
This study investigates empirically how managerial practices have affected macroeconomic adjustment during the Great Recession after the 2008 economic crisis. We start by constructing a country*industry balanced panel data over the 2007-2015 period for eighteen industries in ten OECD countries, and complementing it by two indicators: an indicator of management quality at the country level based on the managerial practices categorical scores at firm level from Bloom et al. (2012); and an indicator at the industry level for the shocks stemming from the 2008 economic crisis. We then rely on the local projection method pioneered by Jordà (2005) to estimate the direct impacts of country management quality indicators and industry economic shocks as well as their joint impacts, on five variables of interest: value-added, employment, labor productivity, wage per employee and labor share during the Great Recession. We find that, in countries where management quality is higher, production and employment are more resilient during the Great Recession, with less production losses and employment damages, no effects on productivity, wage moderation and a slight increase in the labor shares. It appears, moreover, that this resilience is increasing with the size of industry shocks.

Suggested Citation

  • Lopez Jimmy & Mairesse Jacques & Nicoletti Giuseppe, 2020. "Economic Adjustment during the Great Recession: The Role of Managerial QualityAuthor-Name: Cette Gilbert," Working papers 784, Banque de France.
    • Handle: RePEc:bfr:banfra:784
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    References listed on IDEAS

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    1. Nicholas Bloom & Raffaella Sadun & John Van Reenen, 2012. "Americans Do IT Better: US Multinationals and the Productivity Miracle," American Economic Review, American Economic Association, vol. 102(1), pages 167-201, February.
    2. Paulo Santos Monteiro, 2017. "External Imbalances and the Wage Curve: The Role of Labour and Product Market Regulation," European Economy - Discussion Papers 061, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Stefan Bender & Nicholas Bloom & David Card & John Van Reenen & Stefanie Wolter, 2018. "Management Practices, Workforce Selection, and Productivity," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 371-409.
    4. Bertola, Giuseppe, 2017. "European unemployment revisited: Shocks, institutions, integration," Research in Economics, Elsevier, vol. 71(3), pages 588-612.
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    6. Nicholas Bloom & Christos Genakos & Raffaella Sadun & John Van Reenen, 2011. "Management Practices Across Firms and Countries," CEP Discussion Papers dp1109, Centre for Economic Performance, LSE.
    7. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1351-1408.
    8. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages 1-33, March.
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    11. Simon Burgess & Carol Propper & Marisa Ratto & StephanievonHinke KesslerScholder & Emma Tominey, 2010. "Smarter Task Assignment or Greater Effort: The Impact of Incentives on Team Performance," Economic Journal, Royal Economic Society, vol. 120(547), pages 968-989, September.
    12. Michela Giorcelli, 2019. "The Long-Term Effects of Management and Technology Transfers," American Economic Review, American Economic Association, vol. 109(1), pages 121-152, January.
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    18. repec:dau:papers:123456789/4727 is not listed on IDEAS
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    Cited by:

    1. Cirera,Xavier & Vargas Da Cruz,Marcio Jose & Grover,Arti Goswami & Iacovone,Leonardo & Medvedev,Denis & Pereira Lopez,Mariana De La Paz & Reyes,Santiago, 2021. "Firm Recovery during COVID-19 : Six Stylized Facts," Policy Research Working Paper Series 9810, The World Bank.
    2. Benatti, Nicola & Groiss, Martin & Kelly, Petra & Lopez-Garcia, Paloma, 2024. "The impact of environmental regulation on clean innovation: are there crowding out effects?," Working Paper Series 2946, European Central Bank.
    3. Gilbert Cette & Jimmy Lopez & Jacques Mairesse & Giuseppe Nicoletti, 2024. "Employment, Output and Productivity Adjustment During the Great Recession: The Role of Managerial Quality," International Productivity Monitor, Centre for the Study of Living Standards, vol. 46, pages 101-108, Spring.
    4. C. A. K. Lovell, 2021. "The Pandemic, The Climate, and Productivity," CEPA Working Papers Series WP112021, School of Economics, University of Queensland, Australia.

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    More about this item

    Keywords

    Economic adjustment; Employment; Wage; Management quality; Great Recession; Local projection cross-country analysis; Dynamic modelling.;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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