Management Capabilities and Performance of Firms in the Russian Federation
Using the management and operational practices survey in the Russian Federation, this paper finds that an average Russian manufacturing firm adopts 43 percent of the structured management practices (a score of 0.43), a value that is far from the fr...
| Main Authors: | , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/954881567618753375/Management-Capabilities-and-Performance-of-Firms-in-the-Russian-Federation http://hdl.handle.net/10986/32349 |
| Summary: | Using the management and operational
practices survey in the Russian Federation, this paper finds
that an average Russian manufacturing firm adopts 43 percent
of the structured management practices (a score of 0.43), a
value that is far from the frontier (for example, the United
States scores 0.62). This average mask the wide
heterogeneity in practices, where a large share of firms
adopt few structured management practices and only 3.5
percent of them have a score over 0.75. Consistent with the
findings in other countries, better managed firms in Russia
show stronger firm performance, measured as gross revenue
per employee, value added per employee, total factor
productivity, and employment growth. Improving the
management score from the 10th to the 90th percentile is
associated with an increase in sales per worker by 87
percent, value added per worker by 30 percent, and total
factor productivity by 13.5 percent. What drives better
management capabilities? Russian firms are similar to those
in other countries, such that exporters and firms with
foreign linkages are better managed. Switching from
operating purely in the domestic market to being globally
linked is associated with a significant increase in
management capabilities. However, unlike the results in
other countries, management capabilities in Russia are not
associated with firm age, implying that firms do not learn
to be better managed over their life cycle. This result
points to the possibility of inefficient allocation of
resources, such that learning and selection mechanism does
not weed out the badly managed firms, perhaps due to the
lack of pro-competitive forces. |
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