We examine the effect of management practices on the performance of entrepreneurs, micro and small firms. Based on comprehensive data from the German Socio-Economic Panel (SOEP), we construct a management score that captures the quality and effectiveness of management in these firms and we use turnover per employee, i.e. labor productivity as a key measure of firm performance. Our analysis shows a significant positive relationship between higher management scores and firm performance. Our findings highlight the critical role of effective management in improving the resilience and growth trajectories of micro and small businesses.
