Product Market Competition and Management Quality among Small and Medium-sized Enterprises: Evidence from Burkina Faso

Gansonré and Ouédraogo (2020) examine how management quality is related to competition when firms are run by their founders instead of hired managers. While the relationship between competition and managerial incentives is mostly found to be ambiguous in theory, testing it empirically has been challenged by the lack of robust quantitative data. Using a survey on 649 Small and Medium-sized Enterprises (SMEs) from Burkina Faso, the authors measure management  quality, building on the Management and Organizational Practices Survey and find that management quality increases with competition. The results are robust across a range of measures of competition and management sub-indicators.