Abstract:
Management practices are important drivers of firm productivity [Bloom et al. (2019), What drives differences in management practices? American Economic Review, 109(5), 1648–1683]. While differences in the formalisation and sophistication of management practices are evident in comparisons of foreign multinationals and domestic firms [Bloom et al. (2012). Americans do IT better: US multinationals and the productivity miracle. American Economic Review, 102(1), 167–201. Bloom and Van Reenen (2007a). Measuring and explaining management practices across firms and countries, Quarterly Journal of Economics, 122(4), 1351–1408. Bloom and Van Reenen (2010). Why do management practices differ across firms and countries? Journal of Economic Perspectives, 24(1), 203–224], a striking omission from many studies is the failure to distinguish between domestic firms and domestically owned multinationals [McDonnell et al. (2012). Human resource management in multinational enterprises: Evidence from a late industrializing economy. Management International Review, 54(3), 361–380]. We merge the World Management Survey with the FAME dataset to examine the influence of firm ownership (standalone domestic firms; domestic groups; domestic owned multinationals; foreign owned multinationals) across a broad range of management practices. Foreign owned multinationals exhibit the highest formalisation and sophistication of management practices compared to all other firm types. However, significant asymmetries exist between different management practices across firm ownership. This is important as it raises questions as to whether there is sufficient learning and transfer of practices taking place across firms.
