Restructuring and Productivity Growth in UK Manufacturing

37 Pages Posted: 8 May 2001

See all articles by Richard F. Disney

Richard F. Disney

University of Nottingham; Institute for Fiscal Studies (IFS); Axia Economics

Jonathan Haskel

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

Ylva Heden Westerdahl

Queen Mary, University of London

Multiple version iconThere are 2 versions of this paper

Date Written: May 2000

Abstract

We analyse productivity growth in UK manufacturing 1980-92 using the newly available ARD panel of establishments drawn from the Census of Production. We examine the relative importance of 'internal' restructuring (such as new technology and organizational change) and 'external' restructuring (the process by which less efficient establishments exit and more efficient establishments enter and increase market share). We find that (a) 'external restructuring' accounts for 50% of labour productivity growth and 90% of TFP growth over the period; (b) much of the external restructuring effect comes from multi-establishment firms closing down poorly-performing plants and opening high-performing new ones, and (c) external competition is an important determinant of internal restructuring.

Keywords: Entry, exit, market selection, productivity, restructuring, total factor productivity

JEL Classification: L11, L6, O47

Suggested Citation

Disney, Richard F. and Haskel, Jonathan and Heden Westerdahl, Ylva, Restructuring and Productivity Growth in UK Manufacturing (May 2000). CEPR Discussion Paper No. 2463. Available at SSRN: https://ssrn.com/abstract=229408

Richard F. Disney (Contact Author)

University of Nottingham ( email )

School of Economics
Nottingham NG7 2RD
United Kingdom
+44 115 951 5620 (Phone)
+44 115 951 4159 (Fax)

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
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Axia Economics ( email )

38 Concanon Road
London SW2 5TA
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Jonathan Haskel

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom
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

Ylva Heden Westerdahl

Queen Mary, University of London ( email )

Mile End Road
London E1 4NS, London E1 4NS
United Kingdom

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