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Plant-level determinants of total factor productivity in Great Britain, 1997–2008

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  • Richard Harris
  • John Moffat

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Abstract

This paper examines the determinants of total factor productivity (TFP) using a British plant-level dataset. It considers the role of the following four plant characteristics: internal and external knowledge; foreign ownership; multi-plant economies of scale and competition; and spatial spillovers and ‘place’ effects. A wide range of results are obtained, most of which confirm earlier results in the literature, such as that undertaking R&D is positively associated with TFP and most foreign ownership groups have higher than average TFP. The results also confirm the very small number of studies in the literature that have shown that the age of the plant is negatively related to TFP and therefore that vintage effects outweigh any learning-by-doing effects. The inclusion of a wide range of determinants of TFP allows comment on the relative importance of different groups of TFP determinants; knowledge creation is found to be the most important determinant of TFP (especially in manufacturing), with spatial location impacts overall the next largest determinant. Foreign-ownership is founded to be (overall) the least important determinant of TFP although this is partly the consequence of the relatively small size of the foreign-owned sector. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Richard Harris & John Moffat, 2015. "Plant-level determinants of total factor productivity in Great Britain, 1997–2008," Journal of Productivity Analysis, Springer, vol. 44(1), pages 1-20, August.
  • Handle: RePEc:kap:jproda:v:44:y:2015:i:1:p:1-20
    DOI: 10.1007/s11123-015-0442-2
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    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:2:p:311-:d:128748 is not listed on IDEAS
    2. Sai Ding & Alessandra Guariglia & Richard Harris, 2016. "The determinants of productivity in Chinese large and medium-sized industrial firms, 1998–2007," Journal of Productivity Analysis, Springer, vol. 45(2), pages 131-155, April.
    3. repec:bla:growch:v:48:y:2017:i:3:p:313-335 is not listed on IDEAS
    4. Ana Martins & Tiago Domingues & Catarina Branco, 2018. "The Determinants of TFP Growth in the Portuguese Service Sector," GEE Papers 0114, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2018.
    5. repec:taf:pocoec:v:31:y:2019:i:3:p:325-348 is not listed on IDEAS
    6. repec:taf:ecinnt:v:26:y:2017:i:1-2:p:108-120 is not listed on IDEAS
    7. Harris, Richard & Moffat, John, 2016. "Plant closure in Britain since the Great Recession," Economics Letters, Elsevier, vol. 140(C), pages 27-30.
    8. C.J. O’Donnell, 2017. "Estimating Total Factor Productivity Change When No Price or Value-Share Data are Available," CEPA Working Papers Series WP012017, School of Economics, University of Queensland, Australia.

    More about this item

    Keywords

    Productivity; Plant level TFP; Foreign-owned plants; C23; D24; R12;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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