Do well managed firms make better forecasts? (ESCoE DP 2021-18)

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Do well managed firms make better forecasts? (ESCoE DP 2021-18)

By Takafumi Kawakubo, John Van Reenen

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Revised March 2025

We link a new forecast and management panel for over 20,000 firms to data on productivity in manufacturing and services. The panel survey was administered in the UK in July 2017 and November 2020, coinciding with two periods of considerable uncertainty from Brexit and Covid. We find that better-managed firms make more accurate firm sales and macro GDP forecasts. Uniquely, we show better-managed firms are also aware that they make more accurate forecasts, with greater confidence in their predictions. This highlights how superior forecasting ability enables well-managed firms to make improved operational and strategic choices.

The original version of this paper was published on 21 December 2021.