Reproducibility package for Management And Misallocation In Mexico

Developing countries exhibit a substantial productivity gap with the US. Differences in management practices are often cited as a crucial contributing factor. Through the implementation of the first comprehensive management survey in Mexico, we find both a large average management gap with the US, and far greater misallocation. Mexico shows a weaker correlation between firm-size and management than the US, particularly in its highly distorted service sector. One apparent driver is the smaller Mexican product markets. The size-management relationship is weakest in the service sector in low population density regions and in the manufacturing sector in regions furthest from US markets. Another apparent driver is weaker institutions, measured by contract enforcement, crime, corruption, and informality, which are also associated with weaker size-management relationships. These results suggest that such frictions reduce aggregate Mexican management quality and productivity.