Managerial quality Flashcards
1
Q
Managerial quality and different types of poor management
A
managerial quality makes a big difference to TFP
poor management types:
dynastic management- when a firm is passed down a family
crony capitalism- when firms with are run by people because they have connections
state owned enterprises- connection to govt can be used to intimidate competitors
2
Q
Poor management exists because:
A
1) entry costs can be high for outsiders because of high upfront costs and lots of red tape
2) a lack of contract enforcement which leads to the financial market not functioning properly
3) lack of opportunity for buyouts
3
Q
Corruption and growth
A
corrupt officials can intimidate competition, leading to a lack of innovation in the market
