Can more managers drive economic development? Lessons from the collapse of the Japanese Empire: Guest post by Shizuka Inoue - World Bank Blogs

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As economies develop, average firm size rises. Large firms differ from smaller firms in many ways, but in particular, they use managers more intensively. Because large firms account for a larger share of employment in richer economies, those economies also use managers more intensively overall. What explains these patterns? One explanation is that growing demand for goods or technological progress makes it profitable for firms to operate at a larger scale, increasing their demand for managers to support firm growth. But causality may also run in the opposite direction: a larger supply of managers may itself drive firm growth and economic development.