Management Practices in Croatia : Drivers and Consequences for Firm Performance

Embedding management and operational practices survey in a broader firm capabilities survey, this paper finds that an average firm in Croatia scores 0.532 on structured management practices, which is farther from the frontier (0.615 in the United S...

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Main Authors:	Grover, Arti, Iacovone, Leonardo, Chakraborty, Pavel
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2019
Subjects:	MANAGEMENT PRACTICES FIRM PRODUCTIVITY COMPETITIVENESS COMPETITION
Online Access:	http://documents.worldbank.org/curated/en/521611574453619743/Management-Practices-in-Croatia-Drivers-and-Consequences-for-Firm-Performance http://hdl.handle.net/10986/32808

id	okr-10986-32808
recordtype	oai_dc
spelling	okr-10986-328082022-09-20T00:15:04Z Management Practices in Croatia : Drivers and Consequences for Firm Performance Grover, Arti Iacovone, Leonardo Chakraborty, Pavel MANAGEMENT PRACTICES FIRM PRODUCTIVITY COMPETITIVENESS COMPETITION Embedding management and operational practices survey in a broader firm capabilities survey, this paper finds that an average firm in Croatia scores 0.532 on structured management practices, which is farther from the frontier (0.615 in the United States). This average, however, masks the wide heterogeneity in management practices among firms. Relative to advanced countries, a large share of firms in Croatia are badly managed. Management is particularly worse in services and more so in non-knowledge intensive services. Better managed firms show superior performance: improving the management score from the 10th decile to the 90th decile is expected to improve sales per employee by 36 percent, profits by 33 percent and the probability to innovate by 11 percent. Likewise, better managed firms more likely use sophisticated technologies and have a higher probability of accessing external finance. What drives firms to improve their management practices? As elsewhere in the world, global linkages of firms matter. However, unlike the evidence in advanced countries, management capabilities in Croatia is negatively associated with firm age, especially in services, indicating the possibility of allocative inefficiency, where learning and selection mechanism does not weed out the badly managed firms perhaps due to the lack of pro-competitive forces. 2019-12-06T21:08:39Z 2019-12-06T21:08:39Z 2019-11 Working Paper http://documents.worldbank.org/curated/en/521611574453619743/Management-Practices-in-Croatia-Drivers-and-Consequences-for-Firm-Performance http://hdl.handle.net/10986/32808 English Policy Research Working Paper;No. 9067 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Croatia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	MANAGEMENT PRACTICES FIRM PRODUCTIVITY COMPETITIVENESS COMPETITION
spellingShingle	MANAGEMENT PRACTICES FIRM PRODUCTIVITY COMPETITIVENESS COMPETITION Grover, Arti Iacovone, Leonardo Chakraborty, Pavel Management Practices in Croatia : Drivers and Consequences for Firm Performance
geographic_facet	Europe and Central Asia Croatia
relation	Policy Research Working Paper;No. 9067
description	Embedding management and operational practices survey in a broader firm capabilities survey, this paper finds that an average firm in Croatia scores 0.532 on structured management practices, which is farther from the frontier (0.615 in the United States). This average, however, masks the wide heterogeneity in management practices among firms. Relative to advanced countries, a large share of firms in Croatia are badly managed. Management is particularly worse in services and more so in non-knowledge intensive services. Better managed firms show superior performance: improving the management score from the 10th decile to the 90th decile is expected to improve sales per employee by 36 percent, profits by 33 percent and the probability to innovate by 11 percent. Likewise, better managed firms more likely use sophisticated technologies and have a higher probability of accessing external finance. What drives firms to improve their management practices? As elsewhere in the world, global linkages of firms matter. However, unlike the evidence in advanced countries, management capabilities in Croatia is negatively associated with firm age, especially in services, indicating the possibility of allocative inefficiency, where learning and selection mechanism does not weed out the badly managed firms perhaps due to the lack of pro-competitive forces.
format	Working Paper
author	Grover, Arti Iacovone, Leonardo Chakraborty, Pavel
author_facet	Grover, Arti Iacovone, Leonardo Chakraborty, Pavel
author_sort	Grover, Arti
title	Management Practices in Croatia : Drivers and Consequences for Firm Performance
title_short	Management Practices in Croatia : Drivers and Consequences for Firm Performance
title_full	Management Practices in Croatia : Drivers and Consequences for Firm Performance
title_fullStr	Management Practices in Croatia : Drivers and Consequences for Firm Performance
title_full_unstemmed	Management Practices in Croatia : Drivers and Consequences for Firm Performance
title_sort	management practices in croatia : drivers and consequences for firm performance
publisher	World Bank, Washington, DC
publishDate	2019
url	http://documents.worldbank.org/curated/en/521611574453619743/Management-Practices-in-Croatia-Drivers-and-Consequences-for-Firm-Performance http://hdl.handle.net/10986/32808
_version_	1764477342372069376

Management Practices in Croatia : Drivers and Consequences for Firm Performance

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