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Labour Productivity in Auckland Firms

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  • David C. Maré

    ()
    (Motu Economic and Public Policy Research)

Abstract

This paper examines labour productivity in Auckland, New Zealand's largest city, using microdata from Statistics New Zealand's Prototype Longitudinal Business Database. It documents a sizeable productivity premium in Auckland, around half of which is due to industry composition. There is a cross sectional correlation between productivity and employment density, reflecting differences in both physical productivity and prices. This correlation is evident both within Auckland, and comparing Auckland with other areas. The relationship between changes in density and changes in productivity is less strong. The relationship between productivity and overall or own-industry employment density varies across industries, suggesting that the nature and extent of agglomeration benefits varies. Overall, localisation effects appear stronger than urbanisation, with productivity being more strongly related to own-industry density than to overall density.

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Bibliographic Info

Paper provided by Motu Economic and Public Policy Research in its series Working Papers with number 08_12.

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Length: 67 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:mtu:wpaper:08_12

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Keywords: Labour productivity; Urban premium; Agglomeration;

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References

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  1. Glenn Ellison & Edward L. Glaeser, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," Harvard Institute of Economic Research Working Papers 1862, Harvard - Institute of Economic Research.
  2. Geoff Lewis & Steven Stillman, 2007. "Regional economic performance in New Zealand: How does Auckland compare?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(1), pages 29-68.
  3. Mare, David & Timmins, Jason, 2007. "Geographic Concentration and Firm Productivity," Occasional Papers 07/1, Ministry of Economic Development, New Zealand.
  4. Xavier Gabaix, 1999. "Zipf'S Law For Cities: An Explanation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 739-767, August.
  5. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
  6. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117 Elsevier.
  7. David C. Maré, 2005. "Concentration, Specialisation and Agglomeration of firms in New Zealand," Working Papers 05_12, Motu Economic and Public Policy Research.
  8. Arthur Grimes & Yun Liang, 2007. "Spatial Determinants of Land Prices in Auckland:Does the Metropolitan Urban Limit Have an Effect?," Working Papers 07_09, Motu Economic and Public Policy Research.
  9. Junius, Karsten, 1997. "The determinants of urban concentration," Kiel Working Papers 835, Kiel Institute for the World Economy.
  10. Xavier Gabaix, 1999. "Zipf's Law and the Growth of Cities," American Economic Review, American Economic Association, vol. 89(2), pages 129-132, May.
  11. Kwok Tong Soo, 2004. "Zipf's law for cities: a cross country investigation," LSE Research Online Documents on Economics 19947, London School of Economics and Political Science, LSE Library.
  12. Eberts, Randall W. & McMillen, Daniel P., 1999. "Agglomeration economies and urban public infrastructure," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 38, pages 1455-1495 Elsevier.
  13. J. Vernon Henderson, 2000. "The Effects of Urban Concentration on Economic Growth," NBER Working Papers 7503, National Bureau of Economic Research, Inc.
  14. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
  15. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
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Citations

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Cited by:
  1. Daniel J. Graham & David C. Maré, 2010. "Agglomeration Elasticities and Firm Heterogeneity," SERC Discussion Papers 0043, Spatial Economics Research Centre, LSE.
  2. David C. Maré & Daniel J. Graham, 2009. "Agglomeration Elasticities in New Zealand," Working Papers 09_06, Motu Economic and Public Policy Research.
  3. Mok, Penny & Mason, Geoff & Stevens, Philip & Timmins, Jason, 2012. "A Good Worker is Hard to Find: Skills Shortages in New Zealand Firms," Occasional Papers 12/5, Ministry of Economic Development, New Zealand.

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