17 August 2011: Does Management Matter? Evidence from India

Aprajit Mahajan
Stanford University

Abstract:
A long-standing question is whether differences in management practices across firms can explain differences in productivity, especially in developing countries where these spreads appear particularly large. To investigate this we ran a management field experiment on large Indian textile firms. We provided free consulting on management practices to randomly chosen treatment plants and compared their performance to a set of control plants. We find that adopting these management practices raised productivity by 18% through improved quality and efficiency and reduced inventory. Since these practices were profitable this raises the question of why firms had not previously adopted them. Our results suggest that informational barriers were the primary factor explaining this lack of adoption. Since reallocation across firms appeared to be constrained by limits on managerial time, competition did not force badly managed firms to exit.

Date: August 17, 2011
Time: 12:30 P.M.

Venue:
Second Floor Conference Room
The World Bank,
70 Lodi Estate,
New Delhi-110003(INDIA)

Location:

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Note:
Please confirm attendance by mail to Jyoti Sriram at jsriram@worldbank.org by August 16