Vol. 5 No. 2 (2025): Rhombus
ARTICLE

Evaluating Radical Change in the Management Model through a Natural Experiment. Case of the Venezuelan Iron and Steel Industry

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  • Juan Villalva
Juan Villalva
UNEXPO
DOI: https://doi.org/10.63058/rhombus.v5i2.326

Published 2025-07-29

Keywords

  • Natural experiment,
  • Management model,
  • Socialist enterprise,
  • Capitalist enterprise

How to Cite

Villalva, J. (2025). Evaluating Radical Change in the Management Model through a Natural Experiment. Case of the Venezuelan Iron and Steel Industry. Rhombus, 5(2), 85p – 105p. https://doi.org/10.63058/rhombus.v5i2.326

Copyright (c) 2025 Rhombus

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Abstract

This article provides scientific evidence on the impact of shifting from a capitalist to a socialist management model on a country's industry. For this purpose, a natural experiment was conducted on the results of the Venezuelan iron ore mining industry between 2003 and 2014. The experiment used the Venezuelan iron ore mining industry as the unit of study. The industry had been applying a management strategy based on what is known as state capitalism and had radically shifted to a socialist management model since 2009. The Swedish iron ore mining industry, both very similar in terms of capacity, was used as the control group. The natural experiment allowed for a reliable estimation of the causal effects on the productivity and profitability of that country's industrial sector resulting from the application of a socialist management model. The results revealed the negative impact of the implementation of a socialist management model on the Venezuelan iron ore mining industry. The research results were replicated at the business management level in the steel sector through the same natural experiment, using a steel company in Venezuela as the treatment unit and a similar steel company in Brazil as the control unit.

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