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Sources of Labour Productivity Growth at Sector Level in Britain, 1998-2007: A Firm-level Analysis

Listed author(s):
  • Geoff Mason
  • Catherine Robinson
  • Chiara Rosazza Bondibene
Registered author(s):

    This article focuses on the sources of labour productivity at a disaggregated sector level using a range of methods for decomposition, including the dynamic Olley-Pakes decomposition method introduced by Melitz and Polanec (2015) which offers an alternative approach to the standard dynamic decomposition developed by Foster, Haltiwanger and Krizan (2001). Our findings indicate that at the firm level, entry and exit played a relatively minor role in improving labour productivity growth in Britain between 1998-2007, although this masks a great deal of variability in the performance of entrants and exitors. A much more significant contribution to labour productivity throughout the period was achieved through the market share growth of incumbent firms with above average productivity. The interpretation of findings is sensitive to underlying assumptions and the approach adopted.

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    File URL: http://www.rei.unipg.it/rei/article/view/221
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    Article provided by Università di Perugia in its journal Review of Economics and Institutions.

    Volume (Year): 7 (2016)
    Issue (Month): 2 ()
    Pages:

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    Handle: RePEc:pia:review:v:7:y:2016:i:2:n:3
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    1. Marc J. Melitz & Sašo Polanec, 2015. "Dynamic Olley-Pakes productivity decomposition with entry and exit," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 362-375, June.
    2. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters,in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
    3. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    4. Richard Harris & John Moffat, 2012. "Total Factor Productivity Growth in Local Economic Partnership Regions in Britain, 1997-2008," SERC Discussion Papers 0112, Spatial Economics Research Centre, LSE.
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