Skills, Education and Productivity in the Service Sector - Firm Level Evidence on the Presence of Externalities
Increased productivity is one of the main drivers of economic growth. Considering the increasing importance of the service sector in many economies studies of productivity in service firms are essential, but still rare. Questions concerning the underlying reasons for productivity differences in service firms are therefore important. Why is the productivity in certain firms higher than in others and what are the possibilities for less-productive firms to increase their productivity levels? This paper aims to examine these issues with a particular focus on the importance of externalities. Externalities are defined as region-specific economic effects influencing firm efficiency. These externalities can be broadly divided in the following categories: i) urbanization economies which relate to diversity and density (Jacobs externalities), ii) localization economies which concern specialization and concentration (MAR externalities), iii) competition (Porter externalities), and iv) labor market externalities. The purpose of the paper is to explain the productivity levels of Swedish service firms using measures of these externalities. However, also firm specific characteristics, including characteristics of the workforce, are included. These are used both as control variables and to capture potential spillover effects that indirectly affect productivity through the employees. The characteristics of the workforce are essential to include since the employees have the potential to affect the way different firms absorb and use possible spillover effects. They are therefore a crucial component to channel externalities to the firm as a whole. This is the case especially for service firms since these are generally very labor intensive. The results of this study should be of interest to policy makers since they have the possibility to make decisions that contribute to more productive regional environments. This is also of interest to company leaders since they have the possibility to decide where to locate and how to structure their firms in order to take advantage of productivity enhancing externalities.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philippe Martin & Thierry Mayer & Florian Mayneris, 2011.
"Spatial concentration and plant-level productivity in france,"
Sciences Po publications
info:hdl:2441/c8dmi8nm4pd, Sciences Po.
- Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
- Philippe Martin & Thierry Mayer & Florian Mayneris, 2011. "Spatial concentration and plant-level productivity in france," Post-Print hal-01071849, HAL.
- MARTIN, Philippe & MAYER, Thierry & MAYNERIS, Florian, . "Spatial concentration and plant-level productivity in France," CORE Discussion Papers RP 2273, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- William A. Darity & Arthur H. Goldsmith, 1996. "Social Psychology, Unemployment and Macroeconomics," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 121-140, Winter.
- Combes, Pierre-Philippe & Duranton, Gilles, 2001.
"Labour Pooling, Labour Poaching and Spatial Clustering,"
CEPR Discussion Papers
2975, C.E.P.R. Discussion Papers.
- Combes, Pierre-Philippe & Duranton, Gilles, 2006. "Labour pooling, labour poaching, and spatial clustering," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 1-28, January.
- Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor pooling, labor poaching and spatial clustering," LSE Research Online Documents on Economics 20103, London School of Economics and Political Science, LSE Library.
- Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor Pooling, Labor Poaching and Spatial Clustering," CEP Discussion Papers dp0510, Centre for Economic Performance, LSE.
- Pierre-Philippe Combes & Gilles Duranton, 2006. "Labor Pooling, Labor Poaching, and Spatial Clustering," Post-Print halshs-00754183, HAL.
- Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992.
"Growth in Cities,"
Journal of Political Economy,
University of Chicago Press, vol. 100(6), pages 1126-52, December.
- Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
- Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
- Paul Romer, 1989.
"Endogenous Technological Change,"
NBER Working Papers
3210, National Bureau of Economic Research, Inc.
- Andersson, Martin & Klaesson, Johan, 2006. "Regional Interaction & Economic Diversity - exploring the role of geographically overlapping markets for a municipality’s diversity in retail and durables," Working Paper Series in Economics and Institutions of Innovation 49, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Antonio Ciccone & Robert E. Hall, 1995.
"Productivity and the density of economic activity,"
Economics Working Papers
120, Department of Economics and Business, Universitat Pompeu Fabra.
- Rikard Eriksson & Urban Lindgren, 2009. "Localized mobility clusters: impacts of labour market externalities on firm performance," Journal of Economic Geography, Oxford University Press, vol. 9(1), pages 33-53, January.
- J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992.
"Industrial Development in Cities,"
NBER Working Papers
4178, National Bureau of Economic Research, Inc.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Marshall, Alfred, 1890.
"The Principles of Economics,"
History of Economic Thought Books,
McMaster University Archive for the History of Economic Thought, number marshall1890.
- Börje Johansson & Johan Klaesson & Michael Olsson, 2003. "Commuters’ non-linear response to time distances," Journal of Geographical Systems, Springer, vol. 5(3), pages 315-329, November.
- BÃ¶rje Johansson & Johan Klaesson, 2011. "Creative Milieus in the Stockholm Region," Chapters, in: Handbook of Creative Cities, chapter 23 Edward Elgar.
- Bacolod, Marigee & Blum, Bernardo S. & Strange, William C., 2009. "Skills in the city," Journal of Urban Economics, Elsevier, vol. 65(2), pages 136-153, March.
- Johansson, Börje & Klaesson, Johan, 2010. "Creative Milieus In The Stockholm Region," Working Paper Series in Economics and Institutions of Innovation 234, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Börje Johansson & Johan Klaesson & Michael Olsson, 2002. "Time distances and labor market integration," Papers in Regional Science, Springer, vol. 81(3), pages 305-327.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p754. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.