"Managers and Productivity Differences"

Nezih Guner, Andrii Parkhomenko and Gustavo Ventura

Review of Economic Dynamics

October 2017
Guner, CEMFI (nezih.guner@cemfi.es); 
Parkhomenko, University of Southern California - Marshall School of Business (parkhomenko.andrii@gmail.com)
Ventura, Arizona State University (Gustavo.Ventura@asu.edu). 

This folder contains the Matlab code that simulate the results presented in the paper.

File main_code.m is the main code.  Main_code.m refers to mclear.m. 
This file calculates excess demand for capital and labor
for a given set of prices. Excess demand for capital and labor are minimized by using
fminsearch command within main_code.m. Once the equilibrium prices are found, results.m 
calculates additional statistics. 

File main_code.m takes about 200 seconds to find the equilibrium prices (in a laptop computer with
Intel i7_4510U CPU@2.00Ghz with 800 GB RAM)

A) Running main_code.m produces results that are reported in Table 2 of the paper. 
The code also generates 3 figures. First two Figures simply report the fraction
of establishments and employment shares by establishment size.  
The last Figure on life-cycle growth or managerial icnoem appears as Figure 14 in the paper.

B) By changing parameters "A" and "tau" in parameters.m, one can generate the results
presented in Tables 3 and 4 in the paper.

C) In order to produce the results in Table 5, one needs to solve the model 
shutting down the skill investment channel.  In the mode "Fixed Lifetime Skills", 
every manager is endowed with skill profiles as in the benchmark economy.  
In the mode "Fixed Initial Skills", every manager is endowed with initial exogenous skill throughout life.
Each number in Table 5 represents the importance of skill investment mechanism for the effect of tau or A, 
and is calculated as follows.  Suppose we consider the effect of tau.  
Then the importance of skill investment for each variable of interest Y is: 

(Y(skill inv, tau=0.02) - Y(no skill inv, tau=0.02)) / (Y(skill inv, tau=0.02) - Y(skill inv, tau=0))

D) By changing parameters "miu" and "sirgma", one can generate the results presented in Table 6.

E) The excel file "Calibrated A-tau values" provide A and tau values for each country that are used
to produce Figures 15 and 16 in the paper. The excel file also contains the resulting values for GDP
per capita and growth of managerial income (two targets that were used to calibrate A and tau) for each
country.



Please contact us (by sending a message to parkhomenko.andrii@gmail.com) if you have any questions.