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Discussion Paper Details

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Title: Restructuring And Productivity Growth In UK Manufacturing

Author(s): Richard F Disney, Jonathan Haskel and Ylva Heden

Publication Date: May 2000

Keyword(s): Entry, Exit, Market Selection, Productivity, Restructuring and Total Factor Productivity

Programme Area(s): Labour Economics

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.

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Bibliographic Reference

Disney, R, Haskel, J and Heden, Y. 2000. 'Restructuring And Productivity Growth In UK Manufacturing'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2463