Management practices and productivity in Japan: Evidence from six industries in JP MOPS

Abstract

We use the Japanese Management and Organizational Practices Survey (JP MOPS) across six industries to understand the unique and general features of Japanese management practices and their impact on productivity. This study uses management scores, constructed from survey questions about management practices, that intend to measure the quality of operational efficiency embedded in a set of management practices. Our analyses reveal several interesting and shared features of Japanese management practices. First, there is substantial variation in management scores across establishments in each industry. Second, the patterns of management practices and their association with potential drivers are quite similar across the six industries. Third, management scores are high when establishments recognize that they face many competitors. Fourth, management scores are positively associated with labor productivity in most industries. Finally, labor shares decline with management scores. This study shows important roles played by management practices in establishment and firm activities.