Comparative Economic Studies

, Volume 60, Issue 4, pp 502–530 | Cite as

The Role of Innovation and Management Practices in Determining Firm Productivity

  • Wiebke Bartz-Zuccala
  • Pierre Mohnen
  • Helena SchweigerEmail author


In this paper, we compare the impacts of management practices and innovation on productivity, using data from a unique firm-level survey covering 30 countries in Eastern Europe and Central Asia in the period 2011–2014. We estimate a structural model linking productivity to innovation activities and management practices. Results suggest that both returns to innovation and returns to management practices are important drivers of productivity. However, productivity in lower-income economies is affected to a larger extent by management practices than by innovation, while the opposite holds in higher-income economies. These results imply that firms operating in less favourable business environments can reap large productivity gains by improving the quality of management practices, before engaging in innovation through imitating and adapting foreign technologies.


Innovation Management practices Productivity 

JEL Classification

O1 O3 M2 



This paper builds on the authors’ work on the 2014 EBRD Transition Report. We thank an anonymous referee for offering very constructive suggestions. We would like to thank Erik Berglöf, Werner Bönte, Ralph de Haas, Sergei Guriev, Jacques Mairesse, Alexander Plekhanov, Alessandro Sterlacchini, John Van Reenen and Adalbert Winkler for helpful discussions as well as the participants at the 8th MEIDE conference, the 6th Asia–Pacific Innovation conference, UCL SSEES “Achievements and Challenges for the Emerging Economies of Central Europe” Economics and Business Conference, and seminars at the EBRD, KOFF, OECD, SSB Norway, Université de Lille, Universidad de Navarra, Bergische Universität Wuppertal and University of Piacenza for their comments and suggestions. The views expressed in this paper are our own and do not necessarily represent those of the institutions of affiliation.

Supplementary material

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Supplementary material 1 (PDF 158 kb)


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Copyright information

© Association for Comparative Economic Studies 2018

Authors and Affiliations

  1. 1.OECDParisFrance
  2. 2.UNU-MERIT and Maastricht UniversityMaastrichtNetherlands
  3. 3.European Bank for Reconstruction and DevelopmentLondonUK

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