Second-generation family CEOs: are they up to the task?

Family firms are the most prevalent type of firm in the world

All in the family? CEO choice and firm organization

Family firms are the most prevalent firm type in the world, particularly in emerging economies. Dynastic family firms tend to have lower productivity, though what explains their underperformance is still an open question. We collect new data on CEO successions for over 800 firms in Latin America and Europe to document their corporate governance choices and, crucially, provide causal evidence on the effect of dynastic CEO successions on the adoption of managerial best practices tied to improved productivity. Specifically, we establish two key results. First, there is a preference for male heirs: when the founding CEO steps down they are 30pp more likely to keep control within the family when they have a son. Second, instrumenting with the gender of the founder’s children, we estimate dynastic CEO successions lead to 0.8 standard deviations lower adoption of managerial best practices, suggesting an implied productivity decrease of 5 to 10%. To guide our discussion on mechanisms, we build a model with two types of CEOs (family and professional) who decide whether to invest in better management practices. Family CEOs cannot credibly commit to firing employees without incurring reputation costs. This induces lower worker effort and reduces the returns to investing in better management. We find empirical evidence that, controlling for lower skill levels of managers, reputational costs constrain investment in better management

Knowledge and innovation in local production systems of ceramic tiles and the new challenges of the international competition

Este trabalho tem como objetivo contribuir para a compreensão das novas dinâmicas de geração de conhecimento e inovação em sistemas locais de produção a partir dos desafios da concorrência internacional, por meio da realização de estudos em dois sistemas locais da indústria de cerâmica de revestimento no Brasil, um localizado em Santa Gertrudes/SP e outro em Criciúma/SC. O estudo mostrou que os principais movimentos que caracterizaram o cenário competitivo global no período recente foram a expansão da China no mercado internacional; a expansão da indústria espanhola, fortemente calcada na interação com seus fornecedores de colorifícios; e a perda de participação da indústria italiana, a despeito da forte presença da indústria de máquinas e equipamentos. Mesmo com esse contexto de acirramento da concorrência internacional, a indústria brasileira atravessou um período de expansão, com o crescimento concomitante do mercado doméstico e das exportações. Esse crescimento traduziu-se em um elevado dinamismo da indústria, que contou tanto com a expansão da oferta de revestimentos cerâmicos como com mudanças expressivas nos parâmetros técnico-produtivos das empresas, motivadas em grande parte por um conjunto de benefícios decorrentes da aglomeração das empresas.This paper aims to contribute for the understanding of the new dynamics of knowledge and innovation in local production systems from the strengthening of the international rivalry in the ceramic tile industry, by studying two local systems in the Brazilian ceramic tile industry, one located in Santa Gertrudes/SP and the other in Criciuma/SC. The research shows that the current international competitive scenario is being characterized by the China's expansion in the world market; the Spanish expansion embedded in the interaction among their glaze suppliers; and the Italian decreasing market share, despite the strong presence of machinery goods industry. In spite of this global rivalry scenario the Brazilian ceramic tile industry had a expansion period with an increase domestic and exports markets. This increasing can be seem in the huge growth of the domestic industry, not only in the expansion of the supply of ceramic tiles but also in important changes in the techno-productive parameters of the firms, motivated by some benefits that came from the clustering of firms

Bad management: a constraint on economic development?

Are poor management practices holding back middle-income countries? This column looks at the evidence for private firms and public organisations in manufacturing, retail, healthcare and education in India. The findings suggest that there is a large share of badly managed firms that brings down the average quality of Indian businesses. While some Indian firms are at par with the best in the world, diffusion of best practices has not taken place yet

Experiência inicial com a utilização de sensor de pressão no tratamento endovascular de aneurismas de tórax.

Trabalho de Conclusão de Curso - Universidade Federal de Santa Catarina. Curso de Medicina. Dapartamento de Clínica Cirúrgica

International data on measuring management practices

We examine methods used to survey firms on their management and organizational practices. We contrast the strengths and weaknesses of "open ended questions" (like the World Management Survey) with "closed questions" (like the MOPS). For this type of data, open ended questions give higher quality responses, but are more costly than closed question-based surveys

LSE Festival 2021: many of us will return to offices – but not for the whole week

As the pandemic drags on, employers have got better at organising their staff to work from home, says Daniela Scur (Cornell University and LSE). Not all will return to the office, and many will never go back to the five-day commute

Organization matters: the causes and consequences of organizational choices in the private and public sectors

This thesis explores organizational choices of establishments in the public and private sectors. Chapter 1 introduces the topic and details the motivating stylized facts from the main dataset used in this work: theWorld Management Survey (WMS). Chapter 2 focuses on family firms, the most prevalent type of firm in the world, and investigates the relationship between family control and quality of management in manufacturing firms as well the link to firm performance using two new datasets: the Ownership Survey and the WMS. The results suggest that family owned-and-controlled firms are worse managed, with coefficients being over twice larger under 2SLS than OLS. The negative link seems to stem from the family vs non-family control rather than simply family or non-family ownership. Chapter 3 develops a theoretical framework to understand one possible mechanism behind the low adoption of management practices at family firms. The model suggests that industry-specific parameters such as higher cost of laying off workers (ie. unionized environments), higher cost of firm reputation for family CEOs (ie. eponymous firms) and higher shares of low ability workers all contribute to lower adoption of management. Simple stylized facts are presented and testable implications requiring more rigorous tests are suggested. Chapter 4 details the development of an expanded evaluation tool for measuring quality of management in schools mirrored in the tool used in Chapter 2, the Development WMS (D-WMS), and presents the first stylized facts with new data from Mexico, India and Colombia. One of the stylized facts is that there is a large difference in management practices between private and public schools in India. Chapter 5 explores this further and results suggest that what drives the private school management premium is the better people management. Using additional detailed student- and teacher level panel data, I show that the combination of performance-driven teacher selection and pay practices may be behind the parallel private school student achievement premium as well

Organizational capacity and profit shifting

This paper analyses the effect of a firm's organizational capacity on the reported profitability of multinational enterprises (MNEs). Better organizational practices improve productivity and the potential taxable profits of firms. However, higher adoption of these practices may also enable more efficient allocation of profits across tax jurisdictions, lowering actual taxable profits. We present new evidence that MNE subsidiaries with better such practices, when located in high-tax countries, report significantly lower profits and have a higher incidence of bunching around zero returns on assets. We show these results are driven by patterns consistent with profit-shifting behavior. Further, using an event study design, we find that firms with better practices are more responsive to corporate tax rate changes. Our results suggest organizational capacity, especially monitoring-related practices, enables firms to engage in shifting profits away from their high-tax subsidiaries

Measuring and explaining management in schools: new approaches using public data

Why do some students learn more in some schools than others? One consideration receiving growing attention is school management. To study this, researchers need to be able to measure school management accurately and cheaply at scale, and also explain any observed relationship between school management and student learning. This paper introduces a new approach to measurement using existing public data, and applies it to build a management index covering 15,000 schools across 65 countries, and another index covering nearly all public schools in Brazil. Both indices show a strong, positive relationship between school management and student learning. The paper then develops a simple model that formalizes the intuition that strong management practices might be driving learning gains via incentive and selection effects among teachers, students and parents. The paper shows that the predictions of this model hold in public data for Latin America, and draws out implications for policy