Countries and Firms Explaining Managerial Performances

A large body of research in recent years result in the growth of knowledge about better or worse
management practices. However, comparative research using firm-level data has been limited by the
different styles on management and by the unavailability of homogeneous data sources, especially
in former transition and Asian countries. This study fills this gap, by using the firm-level survey
by EBRD and World Bank (BEEPSV-MENA ES, 2012-2014) and by looking at the determinants of a
Management Quality Score (MQS) for more than 17.000 firms in 36 countries of Central Asia, Eastern
Europe and Northern Africa. We find that both, country and firm characteristics, matter for managerial
skills but they weight differently. In fact the country-groupings change, accelerate or dampen the
impact of firms characteristics on management performance so that different channels are conducive
to better managerial practices. Competition, education, and technology are the important channels for
the high-income countries, whereas global value chain participation and ownership are the significant
channels for the low-income countries. In particular, GVC participation enhances significantly managerial
practices of firms in low-income countries especially for the lower quartile firms. Hence, this study
provides empirical support for an interplay between country and firm characteristics in transitional and
emerging markets. In addition, it provides support for an enhanced connection between business
environment reforms devoted to managerial upgrading and industrial policy devoted to enhancing
best-performing firms characteristics. As such, it suggests that only their complementary and targeted
use can support management and business practices upgrading.