Economic adjustment during the great recession: the role of managerial quality

This study investigates empirically how managerial practices have affected macroeconomic adjustment during the Great Recession after the 2008 economic crisis. We use the local projection method pioneered by Jordà ([2005]. “Estimation and Inference of Impulse Responses by Local Projections.” American Economic Review 95 (1): 161–182.) on country-industry balanced panel data over the 2007–2015 period for eighteen industries in ten OECD countries. We find that, in countries where management quality is higher, production and employment have been more resilient during the Great Recession. Moreover, this effect on resilience is stronger for industries deeply affected by the 2008 crisis and goes with wage moderation as well as an unchanged labour share.