Improving Management Practices
There exists a considerable body of evidence testifying to the positive effects of management quality on various aspects of firm performance. An obvious policy implication of these findings is that we should find ways to impart these management skills to firms.
A good historical example is offered by Michela Giorcelli, who measures the long-term impact of US programme that offered management training trips to Italian managers between 1952-1958, as part of the Marshall Plan. She finds that the performance of firms that sent their managers to the trips improved for at least 15 years after the programme. Interestingly, the performance of firms that only received machines also improved, but the improvement flattened over time, while those that combined machines and management training had the greatest improvements in performance.
To test for the effects of management practices, Bloom et al. perform an experiment where they offer free management consulting to textile plants in India. Comparing the performance of firms that did and did not receive the consulting, they find that the former achieved large increases in productivity and an average increase in profits of $325,000, compared to an intervention cost of $200,000.
Despite these positive examples, the literature on management interventions is still inconclusive, as some studies are unable to find effects of interventions on firm performance. Bloom et al. (2017) suggest this might be related to the quality of these interventions, the type of practice they focus on, and the extent to which they manage to elicit a change in management practices among recipient firms.
 See Lippolis and Peel (2018) – “Firms, Productivity Dispersion, and Reallocation”, Background Paper for Programme on Rethinking African Paths to Industrial Development. Blavatnik School of Government and Centre for the Study of African Economies, University of Oxford
 Michela Giorcelli (2017) – “The Long-Term Effects of Management and Technology Transfers”, Mimeo
 Nicholas Bloom, Benn Eifert, Aprajit Mahajan, David McKenzie, and John Roberts – “Does Management Matter? Evidence from India”, Quarterly Journal of Economics, 128(1): 1-51
 Nicholas Bloom, Renata Lemos, Raffaella Sadun, Daniela Scur, and John Van Reenen (2017) – “Management and Productivity in the Private Sector, PEDL Policy Insights Series No. 1