John Van Reenen

John Van Reenen
Massachusetts Institute of Technology | MIT · Department of Economics

About

358
Publications
110,363
Reads
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32,950
Citations
Introduction
Skills and Expertise
Additional affiliations
October 2003 - July 2016
The London School of Economics and Political Science
Position
  • Managing Director
Description
  • Best Applied economics research centre in the world

Publications

Publications (358)
Article
We study how management practices shape export performance using matched productiontrade-management data for Chinese and American firms and a randomized control trial in India. Better managed firms are more likely to export, sell more products to more destinations, and earn higher export revenues and profits. They export higher-quality products at...
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Long-run growth in many models is the product of two terms: the effective number of researchers and their research productivity. We present evidence from various industries, products, and firms showing that research effort is rising substantially while research productivity is declining sharply. A good example is Moore’s Law. The number of research...
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Full-text available
Slow growth over the last decade has prompted policy attention towards increasing R&D spending, often via the tax system. We examine the impact of R&D on firm performance, both by the firm's own investments and through positive (and negative) spillovers from other firms. We analyse panel data on US firms over the last three decades, and allow for t...
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Economic theory suggests that market economies are likely to underprovide innovation because of the public good nature of knowledge. Empirical evidence from the United States and other advanced economies supports this idea. We summarize the pros and cons of different policy instruments for promoting innovation and provide a basic “toolkit” describi...
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Economic theory suggests that market economies are likely to underprovide innovation because of the public good nature of knowledge. Empirical evidence from the United States and other advanced economies supports this idea. We summarize the pros and cons of different policy instruments for promoting innovation and provide a basic “toolkit” describi...
Article
We investigate the link between hospital performance and managerial education by collecting a large database of management practices and skills in hospitals across nine countries. We find that hospitals closer to universities offering both medical education and business education have lower mortality rates from Acute Myocardial Infarction (heart at...
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Partnering with the US Census Bureau, we implement a new survey of "structured" management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We find an enormous dispersion of management practices across plants, with 40 percent of this variation across plants within the same firm. Management practices account for more than 20 p...
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We characterize the factors that determine who becomes an inventor in the United States, focusing on the role of inventive ability (“nature”) versus environment (“nurture”). Using deidentified data on 1.2 million inventors from patent records linked to tax records, we first show that children’s chances of becoming inventors vary sharply with charac...
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Many countries provide financial incentives to spur innovation, ranging from tax incentives to research and development grants. In this paper, we study how such financial incentives affect individuals’ decisions to pursue careers in innovation. We first present empirical evidence on inventors’ career trajectories and income distributions using deid...
Article
Evidence suggests that growth in providers' prices drives growth in health care spending on the privately insured. However, existing work has not systematically differentiated between the growth rate of hospital prices and that of physician prices. We analyzed growth in both types of prices for inpatient and hospital-based outpatient services using...
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We examined the growth in health spending on people with employer-sponsored private insurance in the period 2007-14. Our analysis relied on information from the Health Care Cost Institute data set, which includes insurance claims from Aetna, Humana, and UnitedHealthcare. In the study period private health spending per enrollee grew 16.9 percent, wh...
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We use insurance claims data covering 28% of individuals with employer-sponsored health insurance in the United States to study the variation in health spending on the privately insured, examine the structure of insurer-hospital contracts, and analyze the variation in hospital prices across the nation. Health spending per privately insured benefici...
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We exploit changes in the area-specific eligibility criteria for a program to support jobs through investment subsidies. European rules determine whether an area is eligible for subsidies, and we construct instrumental variables for area eligibility based on parameters of these rule changes. Areas eligible for higher subsidies significantly increas...
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The misallocation of resources is endemic to imperfect competition. We gener-alize the Spence-Dixit-Stiglitz framework to heterogeneous firms, addressing when the market provides optimal quantities, variety and productivity. This yields sev-eral insights. First, constant elasticity of substitution demand ensures market allo-cations are efficient, d...
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We study the relationship among productivity, management practices, and employee ability using German data combining management practices surveys with employees’ longitudinal earnings records. Including human capital reduces the association between productivity and management practices by 30%–50%. Only a small fraction is accounted for by the highe...
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We examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure and set of standards for worldwide interbank telecommunication. We construct a new longitudinal dataset of 6848 banks in 29 countries in Europe and the Americas with the full history of adoption since SWIFT’s initial operations in 1977....
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The recent fall of labor's share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a "superstar firm" model where industries are increasingly characterized by "winner take most" competition, leading a small number of highly profitable (and low labor share) firms to command growing market share. Buildin...
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The fall of labor's share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments of trends in labor's share typically have relied on industry or macro data, obscuring heterogeneity among firms. In this paper, we analyze micro panel data from the U.S....
Article
We investigate the link between hospital performance and managerial education by collecting a large database of management practices and skills in hospitals across nine countries. We find that hospitals closer to universities offering both medical education and business education have lower mortality rates from acute myocardial infarction (heart at...
Article
We examine methods used to survey firms on their management and organizational practices. We contrast the strengths and weaknesses of "open ended questions" (like the World Management Survey) with "closed questions" (like the MOPS). For this type of data, open ended questions give higher quality responses, but are more costly than closed question-b...
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We collect data on management practices in the Punjab region of Pakistan (PK-MOPS) following the MOPS approach pioneered by Bloom et al (2013) for US manufacturing plants. Looking across almost 2,000 establishments we find very wide variation in the management score across firms (and areas within Punjab). Pakistan plants have lower average manageme...
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What will be the long-run economic effects of the United Kingdom’s decision to leave the European Union—informally known as Brexit? Compared with remaining in the European Union, there will inevitably be higher trade costs with the rest of Europe, which accounts for about half of all U.K. trade. This will mean lower trade and foreign investment, an...
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We collect data on management practices in over 1,800 high schools in eight countries. We show that higher management quality is strongly associated with better educational outcomes. The UK, Sweden, Canada and the US obtain the highest management scores, followed by Germany, with a gap before Italy, Brazil and India. We also show that autonomous go...
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Using an innovative survey measure of management practices on over 15,000 firms, we find private equity firms are better managed than government, family, and privately owned firms, and have similar management to publicly listed firms. This is true both in developed and developing countries. Looking at management practices in detail we find that pri...
Article
Over the last decade the World Management Survey (WMS) has collected firm-level management practices data across multiple sectors and countries. We developed the survey to try to explain the large and persistent total factor productivity (TFP) differences across firms and countries. This review paper discusses what has been learned empirically and...
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UK GDP per worker fell by almost 4% in the five years following Lehman's collapse in 2008, something unprecedented in post-war history. A possible reason for poor productivity is low growth in the effective capital–labour ratio. This is likely to have occurred because there has been a fall in real wages and increases in the cost of capital due to t...
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We analyse the role of financial sector workers in the huge rise of the share of earnings going to those at the very top of the pay distribution in the UK. Rising bankers’ bonuses accounted for two-thirds of the increase in the share of the top 1% after 1999. Surprisingly, bankers’ share of earnings showed no decline between the peak of the financi...
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What would be the economic effects of the UK leaving the European Union on living standards of British people? We focus on the effects of trade on welfare net of lower fiscal transfers to the EU. We use a standard quantitative static general equilibrium trade model with multiple sectors, countries and intermediates, as in Costinot and Rodriguez-Cla...
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What was the productivity record under the Labour government of 1997–2010? I show that productivity growth (and economic performance in general) was good when the UK is compared with its main international peers. Only the US had stronger productivity growth and the UK did better than the US in terms of the jobs market. Much of this improved perform...
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What policies and institutions are needed to sustain long-run growth in the UK? We describe an optimistic story of the UK economy over the past 30 years. From the late 1970s, the UK reversed a century of relative decline in terms of per capita GDP with our main counterparts in the US, France and Germany. A key factor behind this improvement was an...
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When will reducing trade barriers against low wage country cause innovation to increase in high wage regions like the US or EU?.We develop a model where factors of production (such as skilled labor) are used to either produce or innovate. Because of sunk investments (like learning bydoing) they become “trapped ” in producing old goods. In this mode...
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We provide new evidence on the growth in pay at the very top of the wage distribution in the United Kingdom. Sectoral decompositions show that workers in the financial sector have accounted for the majority of the gains at the top over the last decade. New results are also presented on the pay of CEOs in the United Kingdom. We show how improved mea...
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We have conducted the first large-scale survey on management practices in transition countries. We found that Central Asian transition countries, such as Uzbekistan and Kazakhstan, have on average very poor management practices. Their average scores are below developing countries such as India. In contrast, the Central European transition countries...
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We show how size-contingent laws can be used to identify the equilibrium and welfare effects of labor regulation. Our framework incorporates such regulations into the Lucas (1978) model and applies it to France where many labor laws start to bind on firms with 50 or more employees. Using population data on �firms between 1995 and 2007, we structura...
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We survey the theoretical and empirical literature on decentralization within firms. We first discuss how the concept of incomplete contracts shapes our views about the organization of decision-making within firms. We then overview the empirical evidence on the determinants of decentralization and on the effects of decentralization on firm performa...
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The Census Bureau recently conducted a survey of management practices in over 30,000 plants across the US, the first large-scale survey of management in America. Analyzing these data reveals several striking results. First, more structured management practices are tightly linked to better performance: establishments adopting more structured practic...
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Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between “dirty” (internal combustion engine) and “clean” (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technolog...
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Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between "dirty" (internal combustion engine) and "clean" (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technolog...
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Chinese manufacturing exporters are capturing low-skill production but driving high-skill innovation in the West
Article
HBR's 90th anniversary is a sensible time to revisit a basic question: Are organizations more likely to succeed if they adopt good management practices? The answer may seem obvious to most HBR readers, but these three economists cast their net much wider than that. In a decadelong study of thousands of organizations in 20 countries, they and their...
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In 2009-10, the UK's budget deficit was about 11 per cent of GDP. A credible plan for fiscal consolidation was introduced in the UK over the fiscal years 2011-12 to 2016-17. In this paper, we assess the impact of the scale and timing of this fiscal consolidation programme on output and unemployment in the UK. During a prolonged period of depression...
Article
Some authors have suggested that deregulation of product and labour markets is responsible for the decline in Labour's share of GDP. A simple model predicts that privatization is associated with a lower labour share, due to job shedding. We test this hypothesis by focusing on privatization of network industries in the OECD. We find that, on average...
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Full-text available
Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific eligibility criteria for a major program to support manufacturing jobs ("Regional Selective Assistance"). Area eligibility is govern...
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Full-text available
US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in Europe also experienced a "productivity miracle." US multinationals obtained higher productivity from IT than non-US multinational...
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Full-text available
For the last decade we have been using double-blind survey techniques and randomized sampling to construct management data on over 10,000 organizations across twenty countries. On average, we find that in manufacturing American, Japanese, and German firms are the best managed. Firms in developing countries, such as Brazil, China and India tend to b...
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Full-text available
The US has experienced a sustained increase in productivity growth since the mid-1990s, particularly in sectorsthat intensively use information technologies (IT). This has not occurred in Europe. If the US "productivitymiracle" is due to a natural advantage of being located in the US then we would not expect to see any evidenceof it for US establis...
Article
Full-text available
Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific eligibility criteria for a major program to support manufacturing jobs ("Regional Selective Assistance"). Area eligibility is govern...
Article
Full-text available
A common view is that the performance of the UK economy between 1997 and 2010 under Labour was very weak and that the current economic problems are a consequence of poor policies in this period. In this report, we analyse the historical performance of the UK economy since 1997 compared with other major advanced economies and with performance prior...
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Full-text available
Chinese economic growth has been spectacular in the last 30 years. We investigate the role of International Joint Ventures with Technology Transfer agreements, an understudied area. Technology transfer is the traditional mechanism for developing countries to "catch up" and has been a key component of Chinese economic policy. We collect original sur...
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Innovation processes within corporations increasingly tap into international technology sources, yet little is known about the relative contribution of different types of innovation channels. We investigate the effectiveness of different types of international technology sourcing activities using survey information on German companies complemented...