Impact of Spatial Proximity on Manufacturing Total Factor Productivity, Great Britain, 1984-2016

Tuesday, November 27, 2018
New Zealand Productivity Commission, Level 15, Fujitsu Tower, 141 The Terrace

Professor Richard Harris
Deputy Dean (Research), Professor of Economics
Durham University Business School

Time: 10.30 – 12.00 

It is generally assumed that spatial proximity positively impacts on a plant’s performance, leading to higher productivity. Using a distance index for each 4-digit SIC, we find that such Marshallian spillovers are by no means universal, and in many cases only benefit larger plants (with sufficient absorptive capacity). We also find other ‘place’ factors impact on TFP, especially the impact of being located in different regions, which are often larger than narrowly defined spatial proximity. We find no evidence for our 6 key sectors, after controlling for other effects, that being located in a major city lead to a positive TFP impact.

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Before joining Durham University Business School in September 2012, Professor Richard Harris held the positions of Alec Cairncross Professor of Applied Economics and Director of the Centre for Public Policy for Regions at Glasgow University. He previously worked at the Universities of Newcastle upon Tyne, Durham and Portsmouth in the UK and Waikato in New Zealand. He holds degrees from the Universities of Belfast, Lancaster and Kent. He is currently a co-investigator on two projects funded by the Economic & Social Research Council examining productivity in the UK.