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Competition and the Dispersion of Labour Productivity amongst UK Companies

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  • Nick Oulton

Abstract

Based on a sample of 140,000 UK companies over the period 1989-93, this paper finds a wide dispersion of labour productivity across firms. Some dispersion is transitory: amongst surviving companies there is regression towards the mean and dispersion falls over time. However, there are significant differences between sectors in the extent of dispersion, e.g. in manufacturing it is 40-50% lower. A possible explanation is greater competition in manufacturing. A role for competition is also suggested by the finding that surviving companies which were initially below the mean improve their performance more rapidly than those initially above the mean.

Suggested Citation

  • Nick Oulton, 1996. "Competition and the Dispersion of Labour Productivity amongst UK Companies," National Institute of Economic and Social Research (NIESR) Discussion Papers 103, National Institute of Economic and Social Research.
  • Handle: RePEc:nsr:niesrd:103
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    Cited by:

    1. Ralf Martin, 2005. "Productivity Dispersion, Competition and Productivity Measurement," CEP Discussion Papers dp0692, Centre for Economic Performance, LSE.
    2. Morikawa, Masayuki, 2012. "Population density and efficiency in energy consumption: An empirical analysis of service establishments," Energy Economics, Elsevier, vol. 34(5), pages 1617-1622.
    3. Hervé Boulhol & Sabien Dobbelaere & Sara Maioli, 2011. "Imports as Product and Labour Market Discipline," British Journal of Industrial Relations, London School of Economics, vol. 49(2), pages 331-361, June.
    4. Moses Acquaah & Tailan Chi, 2007. "A longitudinal analysis of the impact of firm resources and industry characteristics on firm-specific profitability," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 11(3), pages 179-213, September.
    5. Harry Bloch & James McDonald, 2001. "Import Competition and Labor Productivity," Journal of Industry, Competition and Trade, Springer, vol. 1(3), pages 301-319, September.
    6. Molana, Hassan & Montagna, Catia, 2000. "Market structure, cost asymmetries, and fiscal policy effectiveness," Economics Letters, Elsevier, vol. 68(1), pages 101-107, July.
    7. Melville McMillan & Wing Chan, 2006. "University Efficiency: A Comparison and Consolidation of Results from Stochastic and Non-stochastic Methods," Education Economics, Taylor & Francis Journals, vol. 14(1), pages 1-30.
    8. Souma, Wataru & Ikeda, Yuichi & Iyetomi, Hiroshi & Fujiwara, Yoshi, 2009. "Distribution of Labour Productivity in Japan over the Period 1996--2006," Economics Discussion Papers 2009-2, Kiel Institute for the World Economy (IfW Kiel).
    9. Escribano, Álvaro & Stucchi, Rodolfo, 2008. "Catching up in total factor productivity through the business cycle : evidence from Spanish manufacturing surveys," UC3M Working papers. Economics we085125, Universidad Carlos III de Madrid. Departamento de Economía.
    10. Fujiwara, Yoshi & Iyetomi, Hiroshi & Ikeda, Yuichi & Souma, Wataru, 2009. "Distribution of Labour Productivity in Japan over the Period 1996-2006," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-14.
    11. P. Hart, 2000. "Theories of Firms' Growth and the Generation of Jobs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(3), pages 229-248, November.

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