The effect of management practices on the performance of bus enterprises

Bloom and Van Reenen (Quarterly Journal of Economics 122:1351–1408, 2007) examined the relationship between firm management practices and performance and demonstrated that management scores had a positive impact on firm performance. While they focus on the impact of firm management practices on its performance in the manufacturing sector, we examine how firm management practices are related to its performance in the bus industry in Japan, where both private and public companies exist, and these firms are regulated by the government. We find that public companies have better management practices than private companies. The gross output index is taken as the dependent variable with a significant coefficient of the management practice score. However, if the dependent variable is a value-added index, no significant coefficient is obtained. Because the bus industry is regulated, they cannot expect to increase their profits by providing better services. Finally, we find that organizational management practices are more positively related to the firm performance than human resource management practices. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1007/s42495-022-00097-2.