Do Well Managed Firms Make Better Forecasts?

Abstract We link new forecast and management data on 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 forecasts for firm-level turnover and macro-level GDP. Uniquely, we show better-managed firms are also aware that they make more accurate forecasts and have greater confidence in their predictions. This highlights how superior forecasting ability enables well-managed firms to make improved operational and strategic choices.