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The UK productivity puzzle, 2008–2012: evidence using plant-level estimates of total factor productivity

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  • Richard HarrisBy
  • John Moffat

Abstract

This paper presents new information from plant-level data on the UK’s productivity performance since 2008 and considers whether a fall in the capital-labour ratio explains the UK’s productivity puzzle. The results show that, while both manufacturing and services experienced large declines in labour productivity post-2008, the UK’s poor TFP productivity performance is primarily a service sector and small-plant phenomenon. Most of the fall in TFP in services is accounted for by a large negative TFP shock in 2008–2012. By decomposing the change in average labour productivity, it is shown that declines in the intermediate inputs–labour (rather than the capital–labour) ratio and decreases in TFP were responsible for the fall in labour productivity.

Suggested Citation

  • Richard HarrisBy & John Moffat, 2017. "The UK productivity puzzle, 2008–2012: evidence using plant-level estimates of total factor productivity," Oxford Economic Papers, Oxford University Press, vol. 69(3), pages 529-549.
    • Handle: RePEc:oup:oxecpp:v:69:y:2017:i:3:p:529-549.
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    File URL: http://hdl.handle.net/10.1093/oep/gpw057
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    Citations

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    Cited by:

    1. Manderson, Edward J. & Kneller, Richard, 2020. "Energy endowments and the location of manufacturing firms," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    2. Si Xie & Tianshu Li & Ke Cao, 2023. "Analysis of the Impact of Carbon Emission Control on Urban Economic Indicators based on the Concept of Green Economy under Sustainable Development," Sustainability, MDPI, vol. 15(13), pages 1-22, June.
    3. Peng, Jiaying & Xie, Rui & Ma, Chunbo & Fu, Yang, 2021. "Market-based environmental regulation and total factor productivity: Evidence from Chinese enterprises," Economic Modelling, Elsevier, vol. 95(C), pages 394-407.
    4. Diane Coyle & John McHale & Ioannis Bournakis & Jen-Chung Mei, 2024. "Converging to Mediocrity: Trends in Firm-Level Markups in the United Kingdom 2008-2019," Working Papers 047, The Productivity Institute.
    5. Florian Gerth, 2017. "Allocative efficiency of UK firms during the Great Recession," Studies in Economics 1714, School of Economics, University of Kent.
    6. Pontus Mattsson & Jonas Mansson & William H. Greene, 2018. "TFP Change and its Components for Swedish Manufacturing Firms During the 2008-2009 Financial Crisis," Working Papers 18-27, New York University, Leonard N. Stern School of Business, Department of Economics.

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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