Restructuring and Productivity Growth in UK Manufacturing

29 Pages Posted: 13 Jul 2003

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

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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 contribution to productivity growth of 'internal' restructuring (such as new technology and organisational change among survivors) and 'external' restructuring (exit, entry and market share change). We find that (a) 'external restructuring' accounts for 50% of establishment labour productivity growth and 80-90% of establishment TFP growth; (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.

Suggested Citation

Disney, Richard F. and Haskel, Jonathan and Heden Westerdahl, Ylva, Restructuring and Productivity Growth in UK Manufacturing. Economic Journal, Vol. 113, pp. 666-694, July 2003. Available at SSRN: https://ssrn.com/abstract=423327

Richard F. Disney (Contact Author)

University of Nottingham ( email )

School of Economics
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Institute for Fiscal Studies (IFS)

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Axia Economics ( email )

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Jonathan Haskel

Imperial College Business School ( email )

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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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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