GEP Research Paper 02/25
Productivity Levels and Dynamics: UK Service Sector Firms 1988-1998
S. Girma and R. Kneller
Abstract
This paper attempts to explain the level and dynamics of firm level productivity through a model of convergence, for UK service sector firms over the period 1988 to 1998. Firms of different characteristics have different productivity levels and rates of catch-up. We find strong evidence to relate differences in the rate of convergence to the ownership status of the firm and weak evidence that it is related to firm age. Given the high initial productivity of foreign owned firms we suggest that these firms have high absorptive capacity.
Issued in October 2002.
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