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Do Management Interventions Last? Evidence From India

Dec 2017
SCID Working Paper
By  Nicholas A. Bloom, Aprajit Mahajan, David McKenzie, John Roberts

We revisit the plants described in Bloom et al. (2013) eight years after the end of the original management intervention, finding three main results. First, while about half of the management practices adopted in the original experimental plants had been dropped, there was still a large and significant gap between the treatment and control plants. Likewise, there remained a significant performance gap between treatment and control plants, suggesting lasting impacts of effective management interventions. Second, while few management practices had spread across firms, many had spread within firms from the experimental plants to the non-experimental plants, suggesting limited spillovers between firms but large spillovers within firms. Third, managerial turnover and the lack of Director time were two of the most cited reasons for the drop in management practices in experimental plants, highlighting the importance of key employees.