Management in Pakistan: Performance and Conflict

Working Paper
Published on 9 January 2019

Abstract

Working with the Pakistan Bureau of Statistics, Choudhary, Lemos and Van Reenen (2018) collect data on management practices in Pakistan covering 2015 and 2010 in about 4,500 manufacturing firms. They find very large variations within and between the provinces in our survey. Average management scores are well behind those of the global frontier (such as in the US) although there has been some improvement over the last decade. Higher management scores are associated with superior firm performance as measured by productivity, profitability and jobs growth. Firms which have more skilled employees, which are larger, older and/or more export oriented have more structured management practices. The authors find that areas (tehsils) in Pakistan that had the largest increases in terrorist activity over the 2005-2015 period also had the biggest deterioration in management practices. This suggests another (hitherto unexplored) channel through which conflict depresses economic performance.