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The Decline of British Manufacturing, 1973–2012: The Role of Total Factor Productivity

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  • Richard Harris
  • John Moffat

Abstract

This paper uses plant-level estimates of total factor productivity covering 40 years to examine what role, if any, productivity has played in the decline of output share and employment in British manufacturing. The results show that TFP growth in British manufacturing was negative between 1973 and 1982, marginally positive between 1982 and 1994 and strongly positive between 1994 and 2012. Poor TFP performance therefore does not appear to be the main cause of the decline of UK manufacturing. Productivity growth decompositions show that, in the latter period, the largest contributions to TFP growth come from foreign-owned plants, industries that are heavily involved in trade, and industries with high levels of intangible assets.

Suggested Citation

  • Richard Harris & John Moffat, 2019. "The Decline of British Manufacturing, 1973–2012: The Role of Total Factor Productivity," National Institute Economic Review, National Institute of Economic and Social Research, vol. 247(1), pages 19-31, February.
    • Handle: RePEc:sae:niesru:v:247:y:2019:i:1:p:r19-r31
    DOI: 10.1177/002795011924700112
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    References listed on IDEAS

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    1. Paul Krugman, 1997. "The Age of Diminished Expectations, 3rd Edition: U.S. Economic Policy in the 1990s," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611341, December.
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    4. Richard Harris & John Moffat, 2013. "Intangible assets, absorbing knowledge and its impact on firm performance: theory, measurement and policy implications," Contemporary Social Science, Taylor & Francis Journals, vol. 8(3), pages 346-361, November.
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    More about this item

    Keywords

    total factor productivity; manufacturing; decomposition;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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