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Is management a reason for lower productivity in developing countries? Implementing the first comprehensive management survey in Mexico, we find large management gaps with the US, and greater misallocation. Mexico shows a weaker correlation between firm-size and management than the US, particularly in the distorted service sector. One driver is smaller Mexican product markets. Size-management relationships are weakest in the service sector in low population density regions and in regions furthest from US markets in manufacturing. Areas with weak institutions (e.g. contract enforcement, crime, corruption, and informality), also exhibit low size-management relationships.
