The European Journal of Comparative Economics

ISSN: 1824-2979

EJCE Year: 2007, September. Volume: 4 - Issue: 2

Explaining Spatial Variation in Business Performance in Great Britain

by Don J. Webber ; Martin Boddy ; Anthony Plumridge

Start page: 319 - End page: 332

Keywords: Productivity per Employee; Economic Potential; HM Treasury's key Drivers

Jel code: C21; R38; R58



Labour productivity rates are known to vary across UK regions. Although some empirical studies seek to explain the source of these differences using aggregate, regional data we argue that this may be inappropriate because labour productivity rates are firm-specific. This paper employs cross-sectional regression analysis and British, firm-level data to identify empirically whether firm-level labour productivity rates are affected by factors that vary spatially. It focuses in particular on a measure of "economic potential" based on a gravity-type model of economic potential. Initial estimates suggest that economic potential is important but its impact diminishes with the introduction of further explanatory variables. Nevertheless, even once interaction terms are included the effect of economic potential remains important. It suggests the clear need to take account of space in firm-level regressions.

View this article (PDF)

Publisher perpetually authorizes participants in the LOCKSS system to archive and restore EJCE articles through the LOCKSS System for the benefit of all LOCKSS System participants. EJCE is registered as OAI-PMH data provider. OAI - Records check.
In case of problems please write an e-mail to