Managerial Capital and Business R&D as Enablers of Productivity Convergence

Abstract

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A revised approach to productivity convergence in long-term scenarios

“…Already, the previous labour efficiency convergence equation in [2] made the speed of convergence a function of openness. Moreover, Westmore (2013) and Andrews and Westmore (2014) augment this equation and show that an economy's speed of convergence is an increasing function of two enabling factors: managerial quality and business R&D expenditure. Limited data availability prevents these two particular indicators from being tested in the current estimation framework.…”

“…Data on business R&D spending is available from the Science and Technology directorate (STI) for only about 30 countries, and this variable was not found to be statistically significant when tested within the current framework. Also, the data on managerial quality used by Andrews and Westmore (2014) are available for only 20 countries.…”

Raising skills in Portugal

“…Many of the tasks that highly skilled professionals can perform are only used in firms with state-ofthe-art management practices, which are generally associated with improved performance in terms of profitability, growth and survival (Bloom et al, 2012;Adalet McGowan et al, 2015). At the aggregate level, differences in management practices account for a sizeable share of cross-country productivity differentials (Andrews and Westmore, 2014).…”

Fostering Productivity for Income Convergence in the Czech Republic

“…A range of metrics related to managerial quality and practices suggest that Czech practices are outperforming CEE peers but further improvement is needed to catch up to other small, high income countries (Figure 15). Czech firms still have less reliance on professional managementan indicator of overall managerial quality from the Global Competitiveness Report that has been associated with faster convergence in multifactor productivity at the country level (Andrews and Westmore, 2014). There are also particularly large gaps in the perceived quality of management schools, which may contribute to gaps in the knowledge of best practice, and also in the willingness to delegate authority, which may limit firm growth but is dependent on trust and the quality of management at lower levels ( Figure 15; Bloom et al, 2012c).…”