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Management Practices and Resilience to Shocks: Evidence from COVID-19

Author

Listed:
  • Andrea Lamorgese

    (Directorate General for Economics, Statistics and Research, Bank of Italy, 00184 Rome, Italy)

  • Megha Patnaik

    (Libera Università Internazionale degli Studi Sociali (LUISS) Guido Carli, 00197 Rome, Italy; Centre for Economic Policy Research (CEPR), London EC1V 0DX, United Kingdom)

  • Andrea Linarello

    (Directorate General for Economics, Statistics and Research, Bank of Italy, 00184 Rome, Italy)

  • Fabiano Schivardi

    (Libera Università Internazionale degli Studi Sociali (LUISS) Guido Carli, 00197 Rome, Italy; Centre for Economic Policy Research (CEPR), London EC1V 0DX, United Kingdom; Einaudi Institute for Economics and Finance (EIEF), 00187 Rome, Italy)

Abstract

We use the spread of COVID-19 in Italy, the first Western country hit by the pandemic, to investigate the role of structured management practices in responding to a large shock. We exploit a survey eliciting expected sales growth for 2020 to set up a difference-in-difference analysis with repeated cross sections, leveraging the fact that the data collection began prior to the pandemic and continued throughout its spread. We find a sizable effect of such practices on firm performance: a one-standard-deviation increase in the management score increases expected sales growth by 2.3%, against an average drop of 8.3%. Results are confirmed with actual sales growth. Firms with more structured practices were more likely to implement a comprehensive set of changes, including a more intense use of remote work.

Suggested Citation

  • Andrea Lamorgese & Megha Patnaik & Andrea Linarello & Fabiano Schivardi, 2024. "Management Practices and Resilience to Shocks: Evidence from COVID-19," Management Science, INFORMS, vol. 70(12), pages 9058-9072, December.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:12:p:9058-9072
    DOI: 10.1287/mnsc.2021.01341
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