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Labour Productivity in Auckland Firms

Author

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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.

Suggested Citation

  • David C. Maré, 2008. "Labour Productivity in Auckland Firms," Working Papers 08_12, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:08_12
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    References listed on IDEAS

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    1. 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.
    2. David C. Maré & Jason Timmins, 2006. "Geographic concentration and firm productivity," Working Papers 06_08, Motu Economic and Public Policy Research.
    3. 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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    7. 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.
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    9. 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.
    10. 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.
    11. Soo, Kwok Tong, 2005. "Zipf's Law for cities: a cross-country investigation," Regional Science and Urban Economics, Elsevier, vol. 35(3), pages 239-263, May.
    12. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 739-767.
    13. David C. Maré, 2005. "Concentration, Specialisation and Agglomeration of firms in New Zealand," Working Papers 05_12, Motu Economic and Public Policy Research.
    14. 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.
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    Citations

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    Cited by:

    1. Maré, David C. & Graham, Daniel J., 2013. "Agglomeration elasticities and firm heterogeneity," Journal of Urban Economics, Elsevier, vol. 75(C), pages 44-56.
    2. Philip Morrison, 2011. "Local Expressions of Subjective Well-being: The New Zealand Experience," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1039-1058.
    3. David C. Maré & Andrew Coleman & Ruth Pinkerton, 2011. "Patterns of population location in Auckland," Working Papers 11_06, Motu Economic and Public Policy Research.
    4. Richard Fabling & David C Maré, 2015. "Production function estimation using New Zealand’s Longitudinal Business Database," Working Papers 15_15, Motu Economic and Public Policy Research.
    5. David C. Maré, 2016. "Urban Productivity Estimation with Heterogeneous Prices and Labour," Working Papers 16_21, Motu Economic and Public Policy Research.
    6. 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.
    7. Procter, Roger, 2011. "Echanching Productivity: Towards an Updated Action Agenda," Occasional Papers 11/1, Ministry of Economic Development, New Zealand.
    8. Grimes, Arthur & Le Vaillant, Jason & McCann, Philip, 2011. "Auckland's Knowledge Economy: Australasian and European Comparisons," Occasional Papers 11/2, Ministry of Economic Development, New Zealand.
    9. David C. Maré & Daniel J. Graham, 2009. "Agglomeration Elasticities in New Zealand," Working Papers 09_06, Motu Economic and Public Policy Research.

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    More about this item

    Keywords

    Labour productivity; Urban premium; Agglomeration;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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