Managing Trade: Evidence from China and the US / Nicholas Bloom, Kalina Manova, John Van Reenen, Stephen Teng Sun, Zhihong Yu.

Format:

Book

Author/Creator:

Bloom, Nicholas.

Contributor:

National Bureau of Economic Research.

Manova, Kalina.

Van Reenen, John.

Sun, Stephen Teng.

Yu, Zhihong.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24718.

NBER working paper series no. w24718

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Managing Trade

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

We present a heterogeneous-firm model in which management ability increases both production efficiency and product quality. Combining six micro-datasets on management practices, production and trade in Chinese and American firms, we find broad support for the model's predictions. First, better managed firms are more likely to export, sell more products to more destination countries, and earn higher export revenues and profits. Second, better managed exporters have higher prices, higher quality, and lower quality-adjusted prices. Finally, they also use a wider range of inputs, higher quality and more expensive inputs, and imported inputs from more advanced countries. The structural estimates indicate that management is important for improving production efficiency and product quality in both countries, but it matters more in China than in the US, especially for product quality. Panel analysis for the US and a randomized control trial in India suggest that management exerts causal effects on product quality, production efficiency, and exports. Poor management practices may thus hinder trade and growth, especially in developing countries.

Notes:

Print version record

June 2018.