DO UNIONIZED FIRMS HAVE BETTER MANAGEMENT PRACTICES?
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I use unique and innovative survey methodology from World Management Survey (WMS) to collect management practices and union density data from over 10,000 private manufacturing firms across Latin America, North America, and Europe. While it is understood that management practices are highly correlated with firm performance and productivity (Bloom and Van Reenen 2007), the role of labor unions in the adoption of better management practices has yet to be explored. In this paper, I find that unionized firms are significantly better managed. However, looking at the managerial practices in detail, unionized firms have weak People management practices (hiring, firing, and promoting system). In contrast, unionized firms have strong Operations (lean manufacturing implementation), Monitor (performance review and tracking), and Target (setting the right goal and tracking right outcomes) management practices.