Regional Productivity Differentials: Explaining the Gap

Martin Boddy, John Hudson, Anthony Plumridge and Don Webber

No 515, Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol

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.

Keywords: Regional competitiveness; Productivity; UK; Regional development; business-data analysis (search for similar items in EconPapers)
Pages: 21 pages
Date: 2005-12
New Economics Papers: this item is included in nep-eff and nep-geo
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:uwe:wpaper:0515

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