Why is Productivity so Dispersed?

Advanced Institute of Management Research Paper No. 048

31 Pages Posted: 1 Dec 2008

See all articles by Rachel Griffith

Rachel Griffith

Institute for Fiscal Studies (IFS); University of Manchester; Centre for Economic Policy Research (CEPR)

Andy Neely

University of Cambridge; London Business School

Jonathan Haskel

Imperial College Business School; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 1, 2006

Abstract

Many papers have documented wide variations in productivity even in narrowly defined industries. Some have argued that this primarily reflects measurement problems due to, for example, comparing across different products. Others argue this reflects persistent differences in performance due, for example, to management. This paper looks at productivity differences not within an industry but within a firm. We use data on productivity of different branches within lines of business of a major UK-based wholesaler. Using these productivity data for comparisons is, we argue, more likely to compare like with like than comparing between firms. We document sustained differences in productivity even between branches within the same line of business. We also discuss to what extent they are correlated with differences in management and find that differences in management "account" for around 40% of the difference in productivity.

Suggested Citation

Griffith, Rachel and Neely, Andy D. and Haskel, Jonathan, Why is Productivity so Dispersed? (November 1, 2006). Advanced Institute of Management Research Paper No. 048. Available at SSRN: https://ssrn.com/abstract=1309571 or http://dx.doi.org/10.2139/ssrn.1309571

Rachel Griffith (Contact Author)

Institute for Fiscal Studies (IFS) ( email )

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University of Manchester ( email )

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Centre for Economic Policy Research (CEPR)

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Andy D. Neely

University of Cambridge ( email )

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HOME PAGE: http://www.ifm.eng.cam.ac.uk/people/adn1000/

London Business School ( email )

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Jonathan Haskel

Imperial College Business School ( email )

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020 7594 8563 (Phone)
020 7594 5915 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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