GEP Research Paper 00/13
Restructuring and Productivity Growth in UK Manufacturing
Richard Disney, Jonathan Haskel and Ylva Heden
This paper is forthcoming in the Economic Journal, July 2003.
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 organisational 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.
Issued in September 2000.
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