Measuring management practices in Ethiopian firms: Module for the CSA manufacturing survey of medium and large enterprises

The project team has already merged survey data from the Central Statistical Authority's (CSA’s) Census of Medium and Large Enterprises with Ethiopian Revenue and Customs Authority’s firm level trade data. This has resulted in a panel data set. This project aims to disentangle fluctuations in supply of material inputs from other constraints. Also, the larger aim is to examine the constraints on firm productivity and growth, and particularly the measurement of management practices.

To achieve this, a module to measure management practices and the time use of senior managers has been constructed, which can be incorporated into the survey as an extra module. This module was included in this year’s CSA large and medium scale manufacturing survey.  The researchers aim to benchmark the module against practices elsewhere in the world. Additionally, a few questions to capture links to suppliers and customers, regulatory, and related costs, as well as questions to tease out political links are included. Also, an estimate of the wedges due to poor management as well as regulatory and related costs can be produced.

The measurement of management practices in understanding firm performance has a number of important implications for policy. Primarily, it helps policymakers better understand the difference in productivity among fairly similar firms with similar input structures. This helps to disentangle the effects of various interventions on firm productivity from the effects of differences in managerial practices. Additionally, a better understanding of managerial practices among firms will help policymakers design better managerial and institutional support interventions.