Management Practices and Productivity in Germany

Based on a novel dataset, the ‘German Management and Organizational Practices’ (GMOP) Survey, we calculate establishment‐specific management scores following Bloom and van Reenen as indicators of management quality. We find substantial heterogeneity in management practices across establishments in Germany, with small establishments having lower scores than large establishments on average. We show a robust positive and economically important association between the management score and establishment level productivity in Germany. This association increases with establishment size. Comparison to a similar survey in the United States indicates that the average management score is lower in Germany than in the United States. Overall, our results point toward lower management quality being at least in part to blame for the differences in aggregate productivity between Germany and the United States.