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CEP discussion paper

Spatial Determinants of Productivity: Analysis for the Regions of Great Britain


This paper uses NUTS3 sub-regional data for Great Britain to analyse the determinants of spatial variations in income and productivity. We decompose the spatial variation of earnings into a productivity effect and an occupational composition effect. For the former (but not the latter) we find a robust relationship with proximity to economic mass, suggesting that doubling the population of working age proximate to an area is associated with a 3.5% increase in productivity in the area. We measure proximity by travel time, and show that effects decline steeply with time, ceasing to be important beyond approximately 80 minutes.


Patricia Rice and Anthony J. Venables

July 2004     Paper Number CEPDP0642

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This CEP discussion paper is published under the centre's Trade programme.