Publications

This paper describes the 2018 wave of the World Management Survey in Hungary. We compare the management practices of firms run by managers who started their careers before the transition from socialism to capitalism. We find that older managers are less likely to use modern management practices, such as performance monitoring, target setting, and incentives.

How did Hungarian top managers differ in the 1980s and the 1990s? We study manager and entrepreneur biographies, focusing on the role of foreign experience while studying or learning. Early foreign experience, acquired during socialism, is not correlated with firm performance. By contrast, foreign experience acquired after the transition to capitalism is associated with higher firm performance.

We study an almost exhaustive longitudinal panel of business entities in Hungary between 1988 and 2022. We document the entry, exit, and growth of firms, and the characteristics of their owners. We analyze the distribution of firm size, age, and productivity, and the relationship between firm performance and the characteristics of their owners.

We study the demography of entrepreneurs in Hungary using administrative data on firms and their owners between 1986 and 2022. We decompose the number of entrepreneurs and their average age into (i) general demographic trends in the population, (ii) overall entry of entrepreneurs and (iii) changes in the lifecycle of entrepreneur entry and exit.

Using a novel Hungarian dataset on firms and their Chief Executive Officers (CEOs), we estimate the impact of hiring expatriate CEOs. By examining foreign acquisitions where the new owner replaces the incumbent CEO with an expatriate or a local CEO, we address the selection into both acquisition and CEO hiring. Firms led by expatriate CEOs show 13 percent total factor productivity growth, 95 percent sales growth, and increase both exports and domestic sales. Hiring expatriate CEOs enhances firm performance in both international and domestic markets. Our findings suggest that expatriates have superior general management skills.

Good management practices are important determinants of firm success. It is unclear, however, to what extent pro-management policies can shape aggregate outcomes. We use data on corporations and their top managers in Hungary during and after its post-communist transition to document a number of salient patterns. First, the number of managers is low under communism when most employment is in large conglomerates. After the transition to capitalism, the number of managers increased sharply. Second, economics and business degrees became more popular with capitalist transition. Third, newly entering managers tended to run smaller firms than incumbent managers. We build a dynamic equilibrium model to explain these facts. In the model, the number and average quality of managers react to schooling and career choice. We use the model to evaluate hypothetical policies aiming to improve aggregate productivity through management education and corporate liberalization. Our results suggest that variations in the supply of good managers are important to understand the success of management interventions.