Determinants of Management Practices among Manufacturing Firms in Pakistan

Abstract

A strong case for looking at management quality as a source of productivity has been assembled in recent years by studies showing that variations in management quality account for a big part of the productivity gap across firms and countries. In this paper, we investigate the determinants of management quality among Pakistani manufacturing firms, using a new World Bank Enterprise Survey that provides firm-level information on the use of modern management practices. Our findings suggest that the adoption of good management practices is influenced by such characteristics as firm size, product market competition, ownership type, and the information available to staff and managers. We also find that such considerations are more relevant for medium and large firms than for small firms. Finally, we find that the link between management practices and productivity is not uniform and varies from practice to practice.