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The impact of product subsidies on plant‐level total factor productivity in Britain, 1997–2014

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  • Richard Harris
  • John Moffat

Abstract

The United Kingdom’s imminent departure from the European Union provides the opportunity for a more selective industrial strategy. This paper therefore analyses the effect of product subsidies on productivity in British manufacturing plants between 1997 and 2014 in order to provide evidence on the desirability of extending their use. The results suggest that low rates of subsidization had either a positive or no effect but higher rates had a negative effect on total factor productivity in some sectors. This implies that increasing the generosity of subsidies does not offer a means of improving the UK’s productivity performance.

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  • Richard Harris & John Moffat, 2020. "The impact of product subsidies on plant‐level total factor productivity in Britain, 1997–2014," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(4), pages 387-403, September.
    • Handle: RePEc:bla:scotjp:v:67:y:2020:i:4:p:387-403
    DOI: 10.1111/sjpe.12240
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    1. Nicholas Tsounis & Ian Steedman, 2021. "A New Method for Measuring Total Factor Productivity Growth Based on the Full Industry Equilibrium Approach: The Case of the Greek Economy," Economies, MDPI, vol. 9(3), pages 1-21, August.

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