In short: good management doesn’t just improve performance—it reshapes organizations.

With Rachel Schuh, John Hartley, @nickbloom.bsky.social and @johnvanreenen.bsky.social .

Full paper 👉 www.nber.org/papers/w33765

#economics #productivity #management #reallocation #research

Key takeaways:
— Well-managed firms buy, sell, open, and close more plants
— They pass on good practices to new and acquired units
— Banning M&A would lower GDP and management quality by ~15%
— About 20% of productivity gaps across countries are management-related

📄 Paper w/ Brayan Diaz, Andrea Neyra Nazarrett, Julian Ramirez, Raffaella Sadun, Jorge Tamayo
NBER Working Paper #33670
👉 www.nber.org/papers/w33670

So what’s the takeaway?

If you want training to work, you need more than money or policy.
You need middle managers who believe in people—and are trusted in return.

Why? We built a simple model:
Workers only invest in training if they trust that promotions will follow. That trust is manager-specific.
A good manager makes incentives real.

nd it went beyond training.

Teams led by HT managers:
✅ Performed better
✅ Were promoted more
✅ Had less absenteeism—even during major organizational changes.

These “High-Training” (HT) managers didn’t get paid more for encouraging training. But they nudged, supported, and believed in their team’s growth.

When an HT manager arrived, participation jumped:

📊

That variation could be explained by one thing: who the middle manager was.

Managers who were people-focused, proactive, and cared about development boosted training take-up by 45–60% compared to others.

We studied 3 large Latin American firms—a car manufacturer, a retailer, and a fast-food chain. All three offered centrally designed, firm-specific training. Same incentives, same structure.
But participation varied dramatically across teams.