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Labour Productivity in Auckland Firms

Author

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  • Maré, David

    () (Motu Economic & 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

  • Maré, David, 2008. "Labour Productivity in Auckland Firms," Occasional Papers 08/9, Ministry of Economic Development, New Zealand.
  • Handle: RePEc:ris:nzmedo:2008_009
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    References listed on IDEAS

    as
    1. David C. Maré & Jason Timmins, 2006. "Geographic concentration and firm productivity," Working Papers 06_08, Motu Economic and Public Policy Research.
    2. Randall W. Eberts & Daniel P. McMillen, 1999. "Agglomeration Economies and Urban Public Infrastructure," Book chapters authored by Upjohn Institute researchers,in: Paul Cheshire & Edwin S. Mills (ed.), handbook or Regional and Urban Economics, volume 3, pages 1455-1495 W.E. Upjohn Institute for Employment Research.
    3. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
    4. 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.
    5. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    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. 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.
    8. 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.
    9. David C. Maré, 2005. "Concentration, Specialisation and Agglomeration of firms in New Zealand," Working Papers 05_12, Motu Economic and Public Policy Research.
    10. 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.
    11. Junius, Karsten, 1997. "The determinants of urban concentration," Kiel Working Papers 835, Kiel Institute for the World Economy (IfW).
    12. 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.
    13. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 739-767.
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. Philip Morrison, 2011. "Local Expressions of Subjective Well-being: The New Zealand Experience," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1039-1058.
    4. Maré, David C. & Graham, Daniel J., 2013. "Agglomeration elasticities and firm heterogeneity," Journal of Urban Economics, Elsevier, vol. 75(C), pages 44-56.
    5. David C. Maré & Daniel J. Graham, 2009. "Agglomeration Elasticities in New Zealand," Working Papers 09_06, Motu Economic and Public Policy Research.

    More about this item

    Keywords

    Labour productivity; urban premium; agglomeration;

    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)

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