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Regional Productivity Differentials: Explaining the Gap

Author

Listed:
  • Martin Boddy
  • John Hudson
  • Anthony Plumridge
  • Don Webber

    (School of Economics, University of the West of England)

Abstract

Issues of productivity and competitiveness at a regional level have increasingly been a focus for both academic and policy concern. Significant and persistent differences in productivity are evident both in the UK and across Europe as a whole. This paper uses data relating to individual business units to examine the determinants of regional productivity differentials across British regions. It demonstrates that the substantial differences in regional productivity can be explained by a fairly limited set of variables. These include industry mix, the capital employed by the firm, business ownership and the skills of the local labour force. Also important are location-specific factors including travel-time from London and population density. Taken together, these factors largely explain regional productivity differentials. The analysis extends those studies that have identified but not quantified the role of different ‘productivity drivers’ in a systematic fashion or that have focused on only a limited set of drivers. It has important policy implications particular in relation to the role of travel time and possible effects of density and agglomeration.

Suggested Citation

  • Martin Boddy & John Hudson & Anthony Plumridge & Don Webber, 2005. "Regional Productivity Differentials: Explaining the Gap," Working Papers 0515, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    • Handle: RePEc:uwe:wpaper:0515
    as

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    File URL: http://carecon.org.uk/DPs/0515.pdf
    File Function: First version, 2005
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    References listed on IDEAS

    as
    1. Ben Gardiner & Ron Martin & Tyler Peter, 2004. "Competitiveness, Productivity and Economic Growth across the European Regions," ERSA conference papers ersa04p333, European Regional Science Association.
    2. Rice, Patricia & Venables, Anthony J. & Patacchini, Eleonora, 2006. "Spatial determinants of productivity: Analysis for the regions of Great Britain," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 727-752, November.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Don Webber & Paul White, 2008. "Productivity and Proximity," Working Papers 0805, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    6. Roberto Camagni, 2002. "On the Concept of Territorial Competitiveness: Sound or Misleading?," Urban Studies, Urban Studies Journal Limited, vol. 39(13), pages 2395-2411, December.
    7. Criscuolo, Chiara & Ralf Martin, 2003. "Multinationals, foreign ownership and US productivity leadership: Evidence from the UK," Royal Economic Society Annual Conference 2003 50, Royal Economic Society.
    8. Michael Kitson & Ron Martin & Peter Tyler, 2004. "Regional Competitiveness: An Elusive yet Key Concept?," Regional Studies, Taylor & Francis Journals, vol. 38(9), pages 991-999.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. UK productivity: the London effect
      by ? in New Economist on 2006-01-26 18:31:00

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    Cited by:

    1. Don J. Webber & Michael Horswell, 2009. "Microeconomic foundations of geographical variations in labour productivity," Working Papers 0913, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    2. Adrián De León Arias, 2009. "Crecimiento económico en México: la dinámica de la productividad manufacturera regional, 1970-2003," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 27(58), pages 232-263, August.
    3. Don J. Webber & Michael Horswell, 2009. "Winners and Losers: Spatial variations in labour productivity in England and Wales," Working Papers 0912, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.

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    Keywords

    Regional competitiveness; Productivity; UK; Regional development; business-data analysis;
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