Channels of Managerial Capital Accumulation – A Framework and New Evidence from UK Microdata (ESCoE DP 2022-15)

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Channels of Managerial Capital Accumulation – A Framework and New Evidence from UK Microdata (ESCoE DP 2022-15)

By Anna Ardanaz-Badia, Mika Morgan, Jakob Schneebacher

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Organisational capital is usually estimated indirectly, from workforce data or as a residual
from balance sheets. In this paper, we focus on a particular subset of organisational
capital: managerial capital. We propose a comprehensive framework for measuring the
contribution of different channels of managerial capital accumulation, investigate how to
measure them in UK microdata sources, and highlight the trade-offs involved in the
available choices. We then use novel evidence on the distribution of management scores
in Great Britain from the Management and Expectations Survey (MES) to empirically
assess the relative importance of these different accumulation channels. Our analysis
provides a user guide for other researchers and new facts about managerial capital in
Great Britain. We find high correlations between the different channels of managerial
capital accumulation, and distinct bundles of choices across industries and types of firms.