Productivity

Blog

LSE Review of Books:

Creative destruction for growth and change

John Van Reenen introduces his new book, The Economics of Creative Destruction, co-edited with Ufuk Akcigit, which explores how technological innovation can be used to drive growth and tackle problems from inequality to ...Read more...

External publication

Ready for change

Britain's productivity shortfall is its foundational economic problem. Debate about this gap and how to fix it typically focus on raising productivity of existing firms, via two routes. First, innovation: investment, R&D...Read more...

External publication

A tale of two cities (part 2)

Few would disagree that the UK has a significant productivity problem, or fail to recognise that the poor performance of the nation's largest cities outside the capital contribute to that situation. As the Economy 2030 I...Read more...

External publication

A tale of two cities (part 1)

After the success of the Commonwealth Games in 2022, Birmingham is now in the news for the wrong reasons. Financial difficulties facing the City Council culminated in a formal declaration on 5 September 2023 that Britain...Read more...

Blog

INSEAD Knowledge:

Covid-19 furloughs helped firms not just survive, but thrive

Morten Bennedsen, Birthe Larsen, Ian Schmutte and Daniela Scur discuss how the furlough schemes implemented during the pandemic yielded benefits even after Covid-19 restrictions ended and helped firms thrive....Read more...

Blog

LSE Business Review:

Should we call time on presenteeism?

Many companies have adopted a "remote first" approach for their workforce, but a growing number of firms are now demanding that employees work from the office most of the time. Jasmine Virhia and Grace Lordan warn firms ...Read more...

Blog

IFS Zooms In:

Are differences between companies driving inequality and holding back growth? (podcast)

What do we mean when we talk about inequality between firms? Are inequalities between firms limiting UK business dynamism? And do governments need to step in and enforce competition rules? In this podcast episode, John V...Read more...

Blog

Financial Times:

Are Fridays dead? (podcast)

It's Friday afternoon in the city. There are office blocks all around and a restaurant or bar on every corner... so where is everyone? If occupancy and travel data are anything to go by, they're probably at home. Nick Bl...Read more...

Book

The Economics of Creative Destruction
New Research on Themes from Aghion and Howitt

A stellar cast of economists examines the roles of creative destruction in addressing today’s most important political and social questions. Inequality is rising, growth is stagnant while rents accumulate, the env...Read more...

Blog

Harvard Business Review:

Reskilling in the age of AI

As the pace of technological change continues to increase, millions of workers may need to be not just upskilled but reskilled. Companies have a critical role to play in addressing this challenge. To learn more about wha...Read more...

Blog

LSE Business Review:

Why business groups (think Samsung or Tata Group) have an export advantage in emerging markets

With their superior access to capital, knowledge and labour, business groups offer many advantages to their affiliated firms. Daniel Shapiro, Saul Estrin, Michael Carney and Zhixiang (Steven) Liang write that these advan...Read more...

Blog

Vox EU:

Firms' required returns to capital and the missing investment puzzle

Despite falling interest rates over the past decades, investment rates have not increased as standard economic theory would suggest. Niels Joachim Gormsen and Kilian Huber construct a global database of firm discount rat...Read more...

Blog

Vox EU:

Price-setting in a high-inflation environment

Since 2021, inflation rates have increased sharply in many advanced economies. Philip Bunn, Nicholas Bloom, Paul Mizen, Ozgen Ozturk, Gregory Thwaites and Ivan Yotzov study firm pricing strategies during the recent perio...Read more...

Blog

Social Science Space:

Raffaella Sadun On effective management (Podcast)

In this Social Science Bites podcast, Raffaella Sadun discusses her research findings with host David Edmonds, on what exactly we mean by 'management' and what effective management looks like in a workplace....Read more...

Blog

Vox EU:

Loss aversion and consumer inertia: new evidence from phone subscriptions

Across a range of everyday markets, consumers make recurrent tariff choices in the face of a multitude of fees and plans, leading to concerns they may fail to make optimal choices of suppliers or contracts. Christos Gena...Read more...

Blog

VoxTalks Economics:

Is green growth possible? (Podcast)

Is innovation our best hope for dealing with climate change and, if so, how can we stimulate the sort of innovation that we need to make the green energy transition? Philippe Aghion tells Tim Phillips that we need both c...Read more...

CEP discussion paper

Knowledge spillovers from clean innovation. A tradeoff between growth and climate?

Innovation policy faces a tradeoff between growth and climate objectives when the knowledge spillover externality from clean innovation is low compared to other sectors. To make such a comparison, we use patent data to e...Read more...

Blog

LSE Business Review:

The supply chain for electric car batteries is changing the world's geopolitics

The rising demand for electric vehicles is changing the geopolitical landscape, as the world pivots away from fossil fuels towards the materials critical to the EV supply chain. As manufacturers and countries race to sec...Read more...

CEP discussion paper

The impact of Covid-19 on productivity

We analyse the impact of Covid-19 on productivity using data from an innovative monthly firm survey panel that asks for quantitative impacts of Covid on inputs and outputs. We find total factor productivity (TFP) fell by...Read more...

Blog

Vox EU:

Competition and pass-through: lessons from the Greek islands

Although theoretical analysis shows that competition is a key determinant of how firms pass through changes in tax rates to consumers, empirical evidence is scant. This column explores changes in the excise duty on petro...Read more...

External publication

Trading up

After nearly half a century of EU membership, Britain needs a trade strategy. The stakes are high: such a strategy shapes what families and firms buy from abroad, and what gets produced domestically; influences our jobs,...Read more...

CEP discussion paper

Peer pressure and manager pressure in organisations

We study the interaction between horizontal (peer) and vertical (manager) social factors in workers' motivation. In our setting, individuals work using open-plan desks. Using a natural experiment, we identify a sharp inc...Read more...

Blog

Economics Observatory:

How has the Russian invasion of Ukraine affected global financial markets?

As Russia's war against Ukraine continues to unfold, its global economic impact remains uncertain. Evidence from the stock market indicates that firms with strong trade or ownership ties to Russia are more likely to face...Read more...

Blog

LSE USAPP:

The 1918 flu pandemic made some people more religious, and others, more innovative.

Enrico Berkes, Davide Coluccia, Gaia Dossi and Mara Squicciarini investigate whether a destructive event - such as a pandemic - leads to either an increase in religiosity or a boost in innovation efforts. They find that ...Read more...

Blog

LSE:

Why has productivity in the UK slowed? (video)

Growth and productivity are often talked about in UK politics but how are they linked and what effect do they have on the economy? John Van Reenen explains....Read more...

Journal article

Applied Economics Letters: Forthcoming

Telework and productivity: insights from an original survey

Using a unique dataset of approximately 1,400 French manufacturing firms, this study provides insights into their utilization of telework in 2019. Our findings reveal firms that engaged in telework benefit from a Total F...Read more...

CEP discussion paper

Working from home around the world

The pandemic triggered a large, lasting shift to work from home (WFH). To study this shift, we survey full-time workers who finished primary school in 27 countries as of mid-2021 and early 2022. Our cross-country compari...Read more...

CEP discussion paper

Long social distancing

Many working-age Americans say they will continue some forms of social distancing after the COVID-19 pandemic ends. We uncover this long social distancing phenomenon in our monthly Survey of Working Arrangements and Atti...Read more...

CEP discussion paper

FDI and superstar spillovers: evidence from firm-to-firm transactions

Despite competition concerns over the increasing dominance of global corporations, many argue that productivity spillovers from multinationals to domestic firms justify pro-FDI policies. For the first time, we use firm-t...Read more...

Blog

CATO Institute:

The Impact of Regulation on Innovation

Many scholars have been concerned that slower growth in countries with heavy labour regulations could be due to firms' reluctance to innovate given the burden of red tape. Philippe Aghion, Antonin Bergeaud and John Van R...Read more...

Blog

LSE USAPP:

Citizen complaints can be a useful early warning system for governments to act on environmental violations.

Is enabling citizens to complain about public services an effective way of improving government services, or should we be more concerned about their accuracy and reliability? In new research, Jonathan Colmer, Mary Evans,...Read more...

Blog

Vox EU:

Using job postings to quantify remote work

The COVID pandemic initiated an enduring shift to remote work. But there is little evidence to explain where this shift is taking place at a micro level because the sample sizes are too small. Stephen Hansen, Peter Lambe...Read more...

Journal article

The Economic Journal:

Unraveling firms: demand, productivity and markups heterogeneity

We develop a novel framework that simultaneously allows recovering heterogeneity in demand, quantity TFP and markups across firms while leaving the correlation between the three dimensions unrestricted. We accomplish thi...Read more...

Blog

Vox EU:

Local concentration and structural transformation

The national market shares of the leading US firms in many industries have risen substantially over the last four decades - ie, these industries have become more concentrated. David Autor, Christina Patterson and John Va...Read more...

Journal article

The Economic Journal:

Individual consequences of occupational decline

We assess the career earnings losses that individual Swedish workers suffered when their occupations' employment declined. High-quality data allow us to overcome sorting into declining occupations on various attributes, ...Read more...

CEP discussion paper

Modern manufacturing capital, labor demand and product market dynamics: evidence from France

We use comprehensive micro data in the French manufacturing sector between 1995 and 2017 to document the effects of a fall in the cost of investments in modern manufacturing capital, including modern automation technolog...Read more...

CEP discussion paper

Strapped for cash: the role of financial constraints for innovating firms

This paper makes use of a reform that allowed firms to use patents as stand-alone collateral, to estimate the magnitude of collateral constraints and to quantify the aggregate impact of these constraints on misallocation...Read more...

Blog

Vox EU:

Tangible or intangible investment, that is the question: Owner type and investment of private firms

Family business owners are often said to be risk averse, while corporate and institutional owners are less so. Saul Estrin, Jan Hanousek and Anastasiya Shamshur analyse how investment decisions vary across ownership type...Read more...

Blog

LSE Business Review:

Automation creates the space for entirely new jobs: the UK must adopt, adapt and improve

Fears about robots taking people's jobs are overplayed, say Rui Costa and Yuanhang Yu. Their research shows the real fear to overcome should be Britain's lack of productivity-enhancing robots, software, artificial intell...Read more...

CentrePiece article

Adopt, adapt and improve

Fears about robots taking people’s jobs are overplayed, say Rui Costa and Yuanhang Yu. Their Economy 2030 Inquiry briefing shows the real fear to overcome should be Britain’s lack of productivity-enhancing robots, softwa...Read more...

Blog

Promarket:

The Case for Green Industrial Policy

Industrial policy was once so old-fashioned that it was jokingly called "the policy that shall not be named". Now it's back in a big way. On issues ranging from clean energy to semiconductors to Covid-19, governments are...Read more...

Submission to a parliamentary inquiry and government consultation

Business, Energy and Industrial Strategy Committee - UK plc 2050 (non-inquiry session)

The session examines what policies could restore competitiveness and address the country's intractable productivity and regional inequality problems while also reaching net zero....Read more...

Blog

Vox EU:

Robot adoption, worker-firm sorting, and wage inequality: Evidence from administrative panel data

Technological progress has contributed to rising wage inequality in recent decades. Automation and digitalisation increasingly require workers with specialised knowledge for specific tasks, say Ester Faia, Gianmarco Otta...Read more...

Blog

LSE Business Review:

UTOPIA and the City: the future of work in financial and professional services

In the midst of a reorganisation of work caused by the pandemic, there is no one-size-fits-all arrangement and employers are battling to find the right mix between office and home working. To learn more about how to get ...Read more...

Blog

ProMarket:

A New Framework for Better Industrial Policies

Chiara Criscuolo and Guy Lalanne provide a new, conceptual framework for better industrial policy, considering topical areas such as clean energy, Covid-19, and performance of key business sectors....Read more...

Blog

LSE Business Review:

Courage and leadership in 2023

The new economy we are entering into demands a high level of innovation that cannot be achieved by alpha leaders. Grace Lordan writes that successful leadership will require a lot of courage to do things differently, in ...Read more...

Journal article

Economie et Statistique:

Telework and Productivity Before, During and After the COVID-19 Crisis

We use the data from a Banque de France survey, carried out among French companies about their use of telework in 2019 and during the first lockdown in the spring of 2020. Combining this with detailed information regardi...Read more...

Journal article

Economie et Statistique :

Recruitment difficulties and firms' characteristics: an analysis of French company data

This article uses a survey conducted in 2019 among companies in the manufacturing sector on recruitment difficulties they may encounter. By linking this information with the companies' income statements, we show that the...Read more...

Blog

LSE British Politics and Policy:

Investments Zones can drive innovation if we learn from past mistakes

A key part of the previous government's plan for growth and currently being reformulated, Investment Zones have for decades been a policy aimed at delivering regional economic development, or levelling-up. Drawing on evi...Read more...

Blog

The Conversation:

Four-day week trial confirms working less increases wellbeing and productivity

A group of companies that have been trialling a four-day working week have recently reported increased revenue, with fewer employees taking time off or resigning, thus confirming an increase in wellbeing and productivity...Read more...

Journal article

Oxford Bulletin of Economics and Statistics :

The UK's great demand and supply recession*

We revisit the weak productivity performance of the UK since the Great Recession by means of both a suitable theoretical framework and firm-level price and quantity data for detailed products, allowing us to measure both...Read more...

Blog

Research Professional News:

Autumn statement delivered reassurance, but not vision

Investing in innovation is key to the future prosperity of an advanced economy such as the UK. Chancellor Jeremy Hunt's 17 November autumn statement confirmed a commitment to raising public investments in science. Despit...Read more...

Blog

Harvard Business Review:

The Myth of the Brilliant, Charismatic Leader

There's a view out there - call it the "superhero" theory of leadership - in which the individual vision, charisma, and brilliance of a CEO makes or breaks a company. That view is dangerous - not so much because CEOs don...Read more...

Blog

The ECB Blog:

Can Europe be a green innovation leader?

Europe is punching below its weight in the climate-technology competition. The continent needs to facilitate risk capital markets and to invest more in research and development. This is the 4th post in a series of climat...Read more...

Blog

Macroscope, South China Morning Post:

To become a world leader in innovation, China needs to loosen the economic reins

In a push for more tech breakthroughs, China is ramping up state spending on research and development. But without creating space for private sector innovation, China is unlikely to achieve the kind of results it wants....Read more...

Blog

LSE Business Review:

How should we decide when to use artificial intelligence in decision-making?

Should organisations adopt artificial intelligence in their decision-making processes? Grace Lordan, Paris Will, and Dario Krpan write that AI-based methods lead to more efficient hiring decisions, increasing diversity o...Read more...

Blog

LSE Business Review:

Nothing is booming in Britain, except uncertainty. This is not the time to cut public investment in research

Britain has suffered from a turbulent policy environment for a while. Following chancellor Jeremy Hunt's reversal of nearly all of the mini-budget tax measures and reigned in energy support, difficult spending cuts are c...Read more...

CentrePiece article

Stagnation nation

Even before the cost of living crisis, a toxic combination of slow growth and high inequality was threatening UK living standards, particularly for families on low and middle incomes. The Economy 2030 Inquiry is examinin...Read more...

Blog

Vox EU:

Knowledge flows from public labs to private firms

How knowledge spillovers operate between academia and private firms remains an open question. Antonin Bergeaud, Arthur Guillouzouic, Emeric Henry and Clement Malgouyres find strong spillovers through the contracting, mob...Read more...

Blog

LSE:

Inflation: the energy crisis explained (video)

Rising energy bills drive up the cost of living. LSE's Anna Valero explains what led to the current energy crisis and how the transition to net zero emissions will help. ...Read more...

Blog

Vox EU:

Working from home around the world

The Covid-19 pandemic triggered a surge in working from home. This big shift has endured and is likely to continue, even after the pandemic. This column reports that employees value the option to work from home 2-3 days ...Read more...

Blog

LSE Business Review:

What should the next UK prime minister do?

Britain faces crises in energy and productivity, both of which have been crushing people's living standards. However, neither is being addressed by the two leadership candidates, Rishi Sunak and Liz Truss. Anna Valero an...Read more...

Blog

Economics Observatory:

Are wages keeping up with the cost of living?

There is currently much debate about whether pay should keep pace with either productivity or inflation. How we measure price growth has a big influence on what we observe, shedding light on how different parts of the ec...Read more...

Blog

Vox EU:

Structural change within versus across firms: evidence from the US

One feature of the US economy over the last five decades has been the transition away from manufacturing towards services. This column takes a firm-level view of structural change from 1977-2019 to study these sectoral d...Read more...

Blog

LSE Business Review:

Britain, a services superpower sinking into stagnation

British households have low levels of financial resilience and are forecast a sluggish living standards recovery coming out of the COVID-19 pandemic. Currently, Britain is the result of an economy defined by the low grow...Read more...

Blog

Vox EU:

Communication costs, science, and innovation

It seems obvious that lowering the cost of communication among innovators would facilitate scientific and technological progress. Yet, few studies examine this relationship. This column explores the introduction of the f...Read more...

External publication

Stagnation nation: navigating a route to a fairer and more prosperous Britain

The UK has great strengths, but is over a decade into a period of stagnation. The toxic combination of slow growth and high inequality was posing challenges for low-to-middle income Britain's living standards even before...Read more...

Blog

Banque de France:

Ten years on from the business tax reform: how has it affected companies' behaviour?

In 2010, the French corporation tax known as the local economic contribution or CET (contribution economique territoriale) replaced the business tax (TP - taxe professionnelle). This latter tax on production had come und...Read more...

Journal article

Journal of Political Economy:

The origins of firm heterogeneity: a production network approach

We explore firm size heterogeneity in production networks. In comprehensive data for Belgium, firms with more customers have higher total sales but lower sales and lower market shares per customer. Downstream factors, es...Read more...

External publication

Bridging the gap

An economic strategy that helps the UK respond to change and tackle stagnant living standards and productivity will need to address the stubborn spatial disparities in economic performance across the UK. Addressing these...Read more...

CentrePiece article

Reducing gender gaps in mathematics education

Girls and young women underperform in mathematics relative to their male peers - a loss of talent that may hinder productivity growth. Almudena Sevilla and Pilar Cuevas-Ruiz explain how new developments in gender economi...Read more...

Chapter

On the employment consequences of automation and offshoring

in Robots and AI - a new economic era

We argue that automation may make workers and firms more selective in matching their specialized skills and tasks. We call this phenomenon "core-biased technological change", and wonder whether something similar could be...Read more...

Chapter

The effects of automation on labor demand: a survey of the recent literature

in Robots and AI - a new economic era

Robots and artificial intelligence (AI) are powerful forces that will likely have large impacts on the size, direction, and composition of international trade flows. This book discusses how industrial robots, automation,...Read more...

CEP discussion paper

Foreign ownership and robot adoption

This paper shows that multinational enterprises (MNEs) spur the adoption of industrial robots. First, I document a positive and robust correlation between multinational production and robot adoption using a new cross-cou...Read more...

Blog

LSE Business Review:

Bridging the productivity gap between different areas in the UK

An economic strategy that helps the UK respond to change and tackle stagnant living standards and weak productivity will need to address stubborn spatial disparities in economic performance across the UK. Addressing thes...Read more...

Journal article

Economics of Education Review:

Deregulating teacher labor markets

This paper examines how the removal of national pay scales, a common feature of public sector labor markets, affects productivity. We exploit a reform that compelled all schools in England to replace pay scales with scho...Read more...

Blog

LSE Business Review:

Improving productivity through better management practices

John Van Reenen, Nicholas Bloom, and Raffaella Sadun explain how the World Management Survey provides the evidence needed for designing industrial strategies to tackle low productivity....Read more...

Blog

LSE Business Review:

Five ways for leaders to work faster, better, and more inclusively

As the world of work changes, so should leadership. Grace Lordan describes five ways for leaders to become more effective....Read more...

Blog

LSE Covid-19:

Working harder and longer: how managers use their time when working from home

Managers worked longer hours during the pandemic and changed how they used their time, find Thomaz Teodorovicz, Raffaella Sadun, Andrew L. Kun, and Orit Shaer. They suggest how better technology, including AI, could help...Read more...

Blog

VoxEU:

Import liberalisation as export destruction: evidence from the United States

Holger Breinlich, Elsa Leromain, Dennis Novy and Thomas Sampson look at US-China trade relations to examine how import liberalisation brings down import costs and increases competition, but can also lead to lower export ...Read more...

CEP discussion paper

Pay, productivity and management

Using confidential Census matched employer-employee earnings data we find that employees at more productive firms, and firms with more structured management practices, have substantially higher pay, both on average and a...Read more...

Journal article

Annual Review of Economics:

The impact of health information and communication technology on clinical quality, productivity, and workers

The adoption of health information and communication technology (HICT) has surged over the past two decades. We survey the medical and economic literature on HICT adoption and its impact on clinical outcomes, productivit...Read more...

Blog

Economics Observatory:

How can we reduce gender gaps in mathematics education?

Underperformance by girls and young women in mathematics relative to their male peers is a loss of talent that may hinder productivity growth. Almudena Sevilla and Pilar Cuevas-Ruiz explore new developments in our unders...Read more...

External publication

Firms and inequalities

There have been some dramatic changes in the business landscape in American firms over the last four decades that have been extensively documented by researchers and are the subject of much public debate (e.g. Van Reenen...Read more...

CEP Insights

Productivity

Economics is the study of how to share out scarce resources. But it is also about how to make those resources less scarce by creating a bigger economic pie to share. The key to economic growth is increased productivity -...Read more...

Blog

VoxEU:

Teleworking is here to stay and may raise productivity if implemented appropriately

The pandemic triggered a surge in teleworking, raising questions about its persistence as well as its impact on firm performance and worker wellbeing. This column argues that teleworking is here to stay - for most worker...Read more...

Blog

LSE Business Review:

Economists discuss the impact of working from home on productivity, job satisfaction, and women's career progression

The pandemic has led to a big shift to working from home among people in occupations where it is possible for the jobs or some part of them to be done remotely. There has been much debate about the extent to which such f...Read more...

Blog

LSE Covid-19:

Why wellbeing should be the goal of policy

Wherever there is a fixed budget constraint, money should be allocated to policies which give the greatest increase in wellbeing per pound of expenditure, argues Richard Layard. Even policy-makers unmoved by wellbeing as...Read more...

Blog

Brookings:

Gone digital: technology diffusion in the digital era

Flavio Calvino and Chiara Criscuolo examine the reasons for low productivity growth in a period of fast advancement in technological progress and the spread of digital technologies....Read more...

Blog

VoxEU:

Fair and inclusive markets: why fostering dynamism matters

Philippe Aghion, Reda Cherif and Fuad Hasanov explain how economic dynamism is crucial for achieving inclusive growth and shared prosperity....Read more...

Blog

VoxEU:

Tracking business dynamism during the Covid-19 pandemic: new cross-country evidence and visualisation tool

Stefano Agresti, Flavio Calvino, Chiara Criscuolo, Francesco Manaresi and Rudy Verlhac employ a new data visualisation tool to reveal the impact on business dynamism of the Covid-19 crisis in 2020 and in recovery. Findin...Read more...

Blog

Innovation Growth Lab:

Lessons on designing tech RCTs with SMEs

Capucine Riom, Anna Valero and Juliana Oliveira-Cunha look at how new technology based on artificial intelligence can be used to help small and medium-sized businesses improve productivity....Read more...

CEP discussion paper

Do well managed firms make better forecasts?

We link a new UK management survey covering 8,000 firms to panel data on productivity in manufacturing and services. There is a large variation in management practices, which are highly correlated with productivity, prof...Read more...

Blog

VoxEU:

Comparing online to in-person meetings

Covid-19 resulted in a shift towards working from home. This column discusses the findings of a survey of over 2,000 UK working adults, which suggest that online meetings are more efficient for smaller gatherings of 2 to...Read more...

Journal article

Review of Economics and Statistics:

The impact of contract enforcement costs on value chains and aggregate productivity

I study how supplier contracting frictions shape the patterns of intermediate input use and quantify the impact of these distortions on aggregate productivity. Using the frequency of litigation between US firms as a nove...Read more...

Journal article

Research Policy:

Innovative events: product launches, innovation and firm performance

In this paper, we shed new light on the links between firm-level innovation and growth. We introduce data that capture a difficult-to-observe aspect of firms' innovative activity – new product/service launches – at scale...Read more...

Blog

VoxEU:

The human side of productivity: uncovering the role of skills and diversity for firm productivity

Rising dispersion in productivity across firms has focused attention on the drivers of superior performances of a minority of firms at the 'productivity frontier' and disappointing performances of the remaining 'producti...Read more...

Blog

LSE Business Review:

By allowing work to be done externally, broadband technology has increased outsourcing

Domestic outsourcing has grown substantially in developed countries over the past two decades. One reason for this is technological change that allows work to be done externally. Antonin Bergeaud, Clement Malgouyres, Cle...Read more...

Blog

LSE Business Review:

Where are business angels from?

Business angels, those who invest in entrepreneurial ventures at a very early stage, play a key role for new business development, which can help improve a country's productivity. But where are business angels from? Fei...Read more...

CEP discussion paper

Air pollution and innovation

If air pollution harms innovation -- and therefore future productivity -- existing assessments of its economic cost are incomplete. We estimate the effect of fine particulate matter concentration on inventive output in 1...Read more...

Blog

LSE Business Review:

Covid-19 spurred a wave of new technology adoption by UK businesses

The pandemic spurred three-quarters of firms to adopt new technologies, and businesses are keen to continue with this innovation mindset, which could be harnessed to fulfil the UK's net zero commitments. Anna Valero, Cap...Read more...

External publication

Business time

The UK is set for a decade of major change, with private sector firms in the front line. How ready are they for this change? What form should policy towards business take within a new economic strategy for the UK? This r...Read more...

Blog

LSE Business Review:

How new technology can help clinical quality, productivity, and the healthcare workforce

Health information and communication technology (HICT) holds enormous potential to improve productivity. Several countries, the UK and the US included, have embraced this idea and spent billions of dollars on promoting H...Read more...

CEP Covid-19 analysis

The business response to Covid-19 one year on: findings from the second wave of the CEP-CBI survey on technology adoption

We present new data from a survey of 425 UK businesses conducted in July 2021 in partnership with the Confederation of British Industry (CBI), which seeks to understand the ways in which firms have innovated one year on ...Read more...

CEP discussion paper

Have productivity and pay decoupled in the UK?

In the long-run at the macro level, the real pay of workers tends to follow labour productivity. In recent years, however, there have been concerns that this relationship has broken down and that pay has become "decouple...Read more...

Journal article

Journal of International Economics:

Import competition, heterogeneous preferences of managers, and productivity

When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While th...Read more...

Journal article

Energy Economics:

Power outages and firm performance: A hydro-IV approach for a single electricity grid

We estimate the impact of power outages on firm performance using a hydro-instrumental variable strategy which integrates a river flow with a hydropower generation model and an electricity-grid-based distance interpolati...Read more...

Blog

VoxEU:

Covid-19 and structural change

Covid-19 has had a sizeable impact on where people work and how they shop. This column uses data from the Decision Maker Panel business survey of 3,000 UK firms to assess the longer-run impact. The pandemic is expected t...Read more...

CentrePiece article

Poland's economy in the pandemic

The Polish economy has largely managed to avoid the pandemic-induced troubles experienced in Western Europe. But as Pawel Bukowski and Wojtek Paczos argue, contrary to government claims of able stewardship, what has got ...Read more...

Journal article

American Economic Journal: Applied Economics:

Temperature, Labor Reallocation, and Industrial Production: Evidence from India

To what degree can labor reallocation mitigate the economic consequences of weather-driven agricultural productivity shocks? I estimate that temperature-driven reductions in the demand for agricultural labor in India are...Read more...

Blog

LSE Business Review:

How do internal communication flows change when a new CEO is appointed?

CEO turnovers are significant organisational events that typically mark a discontinuity in firm strategy and operations. These likely changes are visible in internal communication flows. Stephen Michael Impink, Andrea Pr...Read more...

CEP report

Seizing sustainable growth opportunities from carbon capture, usage and storage in the UK

Seizing opportunities from the CCUS value chain can be part of an economy-wide, net-zero-aligned growth path in the UK. The UK has responded to the climate emergency facing the world with an economy-wide target to reach...Read more...

CEP discussion paper

The impact of healthcare IT on clinical quality, productivity and workers

Adoption of health information and communication technologies ('HICT') has surged over the past two decades. We survey the medical and economic literature on HICT adoption and its impact on clinical outcomes, productivit...Read more...

CEP discussion paper

Internet access and its implications for productivity, inequality and resilience

About one-fifth of paid workdays will be supplied from home in the post-pandemic economy, and more than one-fourth on an earnings-weighted basis. In view of this projection, we consider some implications of home internet...Read more...

CEP Insights

Green Growth

Many countries have plans for a "green recovery" from the pandemic, in which the invention and diffusion of "clean" technologies and practices are central. How can environmental and broader industrial policies be combine...Read more...

CEP discussion paper

Organizational capacity and profit shifting

Good organizational capacity drives productivity and potential taxable profits but may also enable multinationals (MNEs) to more efficiently re-allocate profits across tax jurisdictions, lowering actual taxable profits. ...Read more...

CEP discussion paper

Why working from home will stick

Covid-19 drove a mass social experiment in working from home (WFH). We survey more than 30,000 Americans over multiple waves to investigate whether WFH will stick, and why. Our data say that 20 percent of full workdays w...Read more...

Blog

VoxEU:

How disruptive technologies diffuse

Nicholas Bloom, Tarek Hassan, Aakash Kalyani, Josh Lerner, Ahmed Tahoun question how technical progress influences income and wealth inequality in the US and its affects on higher and lower-skilled hiring rates....Read more...

Submission to a parliamentary inquiry and government consultation

Jobs, growth, and productivity after coronavirus

The Committee will examine how the Government can reduce and mitigate economic scarring and job losses after the pandemic, how much difference the Government can make to economic growth, and what has caused the UK's prod...Read more...

Journal article

Journal of Political Economy:

Are bigger banks better? Firm-level evidence from Germany

The effects of large banks on the real economy are theoretically ambiguous and politically controversial. I identify quasi-exogenous increases in bank size in postwar Germany. I show that firms did not grow faster after ...Read more...

Journal article

Oxford Review of Economic Policy:

The World Management Survey at 18: Lessons and the way forward

Understanding how differences in management 'best practices' affect organizational outcomes has been a focus of both theoretical and empirical work in the fields of management, sociology, economics, and public policy. Th...Read more...

CentrePiece article

Going for growth that's sustainable and equitable

In the second anniversary lecture marking 30 years since CEP began, former director John Van Reenen focused on productivity, an issue that has been at the heart of the Centre's work for three decades. He sets out how tec...Read more...

Blog

LSE Covid-19:

The 2020s will be a crunch decade that will determine the UK's trajectory into the mid-21st century

As vaccines roll out and restrictions are lifted, public debate is turning to the economic recovery from Covid-19 and the deepest annual downturn for 300 years that came in its wake. But viewing the years ahead simply as...Read more...

External publication

The UK's decisive decade: the launch report for The Economy 2030 Inquiry

This report marks the launch of The Economy 2030 Inquiry, a landmark collaboration between the Resolution Foundation and the Centre for Economic Performance at the London School of Economics, funded by the Nuffield Found...Read more...

Journal article

AEA Papers & Proceedings:

The Family Origin of the Math Gender Gap is a White Affluent Phenomenon

Previous research has shown that norms around the role of women in society could help explain the gender gap in mathematics and that these norms could be transmitted within the family. Using data from the Florida Departm...Read more...

Blog

Economics Observatory:

What is the future of working from home?

Working from home has become more common during the pandemic, but only in certain sectors. Jonathan Haskel writes about the likelihood that the practice will be permanently adopted depends on perceptions of workforce pro...Read more...

Journal article

Journal of the European Economic Association:

Parents, Schools and Human Capital Differences Across Countries

This paper studies the contribution of parental influence in accounting for cross-country gaps in human capital achievements. We argue that the cross-country variation in unobserved parental characteristics is at least a...Read more...

Blog

LSE British Politics and Policy:

Budget 2021: while important steps have been taken, bolder and better coordinated action is needed for a sustainable recovery

Anna Valero writes that the underlying and urgent issues that were facing the UK economy before the pandemic, such as high levels of inequality and weak productivity, are still present, and are indeed more pressing than ...Read more...

CentrePiece article

Innovation policy to restore American prosperity

The new US administration has the opportunity to reset an economic model that has failed to deliver prosperity for millions of Americans for decades. John Van Reenen calls for a Grand Innovation Challenge Fund – federal ...Read more...

Blog

LSE Business Review:

Increasing support for clean innovation: a win-win-win strategy?

Political support for government spending to deal with the economic aftermath of the COVID pandemic has grown. It is now greater than during the 2008 financial crisis, and 'build back better' pledges have multiplied. Ral...Read more...

Blog

VoxEU:

Regulation chills minor (but not radical) technological innovations

While there is suggestive evidence that regulations may have a stifling effect on innovation, there is as yet no rigorous economic framework to quantify the magnitude of such regulatory effects on innovation and the aggr...Read more...

CEP Covid-19 analysis

A major wave of UK business closures by April 2021? The scale of the problem and what can be done

This report presents an analysis of the financial health of UK businesses, which shows that immediate action is needed to prevent a wave of corporate failure in early April. We cannot delay action. Now is also the moment...Read more...

CEP discussion paper

Markups, intangible capital and heterogeneous financial frictions

This paper studies the interaction between financial frictions, intangible investment decisions, and markups at the firm level. In our model, heterogeneous credit constraints distort firms' decisions to invest in cost-re...Read more...

Blog

Institute for the Future of Work:

The impact of Covid-19 on technology adoption

Anna Valero and Professor John Van Reenen examine the evidence on technology adoption through the pandemic and what it means for the UK's future of work and productivity crisis. New evidence offers a basis for guarded te...Read more...

Journal article

The Economic Journal:

Trapped Factors and China’s Impact on Global Growth

After a recent increase in Chinese import competition, European firms increased innovation. We present and rationalise these patterns using ‘trapped factors’ at the micro level within a stylised equilibrium model of prod...Read more...

CEP Covid-19 analysis

Innovation for a strong and sustainable recovery

In the recovery from Covid-19, innovation and diffusion will be key to addressing several structural challenges facing the UK economy. These include improving the UK’s longstanding poor productivity performance, addressi...Read more...

CEP discussion paper

The UK's great demand and supply recession

We revisit UK’s poor productivity performance since the Great Recession by means of both a suitable theoretical framework and firm-level prices and quantities data for detailed products allowing us to both measure demand...Read more...

CEP discussion paper

Quality of life in a dynamic spatial model

We develop a dynamic spatial model in which heterogeneous workers are imperfectly mobile and forward-looking and yet all structural fundamentals can be inverted without assuming that the economy is in a stationary spatia...Read more...

CEP discussion paper

Are bigger banks better? Firm-level evidence from Germany

The effects of large banks on the real economy are theoretically ambiguous and politically controversial. I identify quasi-exogenous increases in bank size in post-war Germany. I show that firms did not grow faster after...Read more...

Journal article

Quarterly Journal of Economics:

Misallocation in the market for inputs: Enforcement and the organization of production

The strength of contract enforcement determines how firms source inputs and organize production. Using microdata on Indian manufacturing plants, we show that production and sourcing decisions appear systematically distor...Read more...

Journal article

Journal of Political Economy:

Productivity and organization in portuguese firms

Using employer-employee matched and firm production quantity and input data for Portuguese firms, we study the endogenous response of productivity to firm reorganizations as measured by changes in the number of managemen...Read more...

Blog

LSE Business Review:

Covid has forced many firms to innovate, with possible lasting impacts

A survey reveals greater UK innovation rates than what we might have expected in the absence of a pandemic, write Capucine Riom and Anna Valero....Read more...

Blog

Economics Observatory:

Will coronavirus cause a big city exodus?

Big cities thrive because of the economic and social benefits of proximity - but proximity also helps to spread Covid-19. Does this mean an end to the big city revival of recent years? Much will depend on how quickly we ...Read more...

Blog

LSE Business Review:

Productivity growth in one country affects the relative income and welfare of its trade partners

One of the most dramatic changes in the world economy over the past half century has been the emergence of China as a major force in world trade. A central question in international economics is the implications of such ...Read more...

Journal article

Journal of International Economics:

Trade liberalization, input intermediaries and firm productivity: Evidence from China

We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effe...Read more...

Journal article

The Review of Economics and Statistics:

Product mix and firm productivity responses to trade competition

We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, French firms skew their export sal...Read more...

CEP discussion paper

International friends and enemies

We develop sufficient statistics of countries’ bilateral income and welfare exposure to foreign productivity shocks that are exact for small shocks in the class of models with a constant trade elasticity. For large shock...Read more...

Blog

LSE Business Review:

Dream jobs: managers in internationally active firms have higher lifetime wages

People at managerial level in international companies accumulate strong experience that is useful also in other firms, write Giordano Mion, Luca David Opromolla, and Gianmarco Ottaviano....Read more...

Journal article

European Journal of Finance:

Is firm-level clean or dirty innovation valued more?

We examine how Tobin's Q is linked to 'clean' and 'dirty' innovation and innovation efficiency at the firm level. Clean innovation relates to patented technologies in areas such as renewable energy generation and electri...Read more...

CEP Covid-19 analysis

Strategy, investment and policy for a strong and sustainable recovery: an action plan

The UK and the world have suffered disruption and hardship from the COVID-19 pandemic on an immense scale. Together with the tragic consequences of the health crisis, there is now a real risk of protracted global depress...Read more...

CEP discussion paper

International financial flows and misallocation

We study the impact of international financial flows on credit allocation exploiting the early 2000s boom of capital inflows in Italy. Using detailed bank-firm matched data we compare the patterns of credit allocation of...Read more...

Journal article

Journal of Economic Perspectives:

Place-based policies and spatial disparities across European cities

Spatial disparities in income and worklessness across areas of the European Union are profound and persistent. Concerns about these disparities and the appropriate policy response are longstanding. Two trends have re-ene...Read more...

Journal article

Heliyon:

Estimating the impact of the Internet of Things on productivity in Europe

The Internet of Things (IoT) refers to interconnected devices and objects that collect and transmit data via the Internet. The IoT is an evolving technology, promising to revolutionise industries, but also demanding far-...Read more...

Journal article

The Economic Journal:

Skill-biased management: evidence from manufacturing firms

This article investigates the link between management practices and workforce skills in manufacturing firms, exploiting geographical variation in the supply of human capital. Skills measures are constructed using newly c...Read more...

CEP discussion paper

On the productivity advantage of cities

Ever since Marshall (1890) agglomeration externalities have been viewed as the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities str...Read more...

Journal article

Oxford Bulletin of Economics and Statistics:

Do apprenticeships pay? Evidence for England

The importance of apprenticeships for early labour market transitions varies across countries and over time. In recent times, there has been a policy drive to increase the number of people undertaking apprenticeships in ...Read more...

Blog

CVER Blog:

Training grants: a useful policy to address skills and productivity gaps?

As work changes, firm-provided training may become more relevant for good economic and social outcomes. However, so far there is little or no causal evidence about the effects of training on firms. Pedro Martins looks at...Read more...

CVER Research Paper

Employee Training and Firm Performance:Quasi-experimental evidence from the European Social Fund

As work changes, firm-provided training may become more relevant for good economic and social outcomes. However, so far there is little or no causal evidence about the effects of training on firms. This paper studies a l...Read more...

Blog

LSE Business Review:

Does more competition spur innovation or discourage it?

Less-productive firms that are family owned and managed see the greatest improvement in productivity, write Cheng Chen and Claudia Steinwender....Read more...

CEP industrial strategy paper

Has the Financial Crisis Undermined Credit Reallocation in the United Kingdom?

The global financial crisis and its aftermath heightened awareness of the role of credit frictions in affecting aggregate economic performance. An important question is whether capital is being allocated to its most prod...Read more...

Journal article

The Quarterly Journal of Economics:

The fall of the labor share and the rise of superstar firms

The fall of labor's share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments typically rely on industry or macro data...Read more...

CEP discussion paper

Import competition, heterogeneous preferences of managers and productivity

When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While th...Read more...

CEP discussion paper

The aggregate consequences of default risk: evidence from firm-level data

This paper studies the implications of perceived default risk for aggregate output and productivity. Using a model of credit contracts with moral hazard, we show that a firm’s probability of default is a sufficient stati...Read more...

Blog

LSE Business Review:

Public investment in defence research can increase business innovation

That doesn't mean that defence R&D is the most efficient way to stimulate private sector innovation and productivity, write Enrico Moretti, Claudia Steinwender and John van Reenen....Read more...

CEP discussion paper

Trade, productivity and (mis)allocation

We examine the gains from globalization in the presence of firm heterogeneity and potential resource misallocation. We show theoretically that without distortions, bilateral and export liberalizations increase aggregate ...Read more...

CEP discussion paper

Trade liberalization, input intermediaries and firm productivity: evidence from China

We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effe...Read more...

Journal article

Fiscal Studies:

Have R&D Spillovers Declined in the 21st Century?

Slow growth over the last decade has prompted policy attention towards increasing R&D spending, often via the tax system. We examine the impact of R&D on firm performance, both by the firm's own investments and through p...Read more...

CEP election analysis

The UK economy: policies for investment and productivity growth

Since the global financial crisis, the UK has been grappling with persistent poor productivity performance. While a number of factors have been at play, reduced investment due to austerity harmed growth in the early year...Read more...

CEP election analysis

The labour market

The UK labour market, at first glance, seems to be playing at Dr Jekyll and Mr Hyde. Employment (in terms of both levels and rates) is at record highs, yet wage growth has been extraordinarily weak. One view is that thes...Read more...

CEP discussion paper

The intellectual spoils of war? Defense R&D, productivity and international spillovers

Abstract We examine the impact of government funding for R&D - and defense-related R&D in particular - on privately conducted R&D, and its ultimate effect on productivity growth. We estimate longitudinal models that rel...Read more...

CEP discussion paper

Measuring the gains from labor specialization

We estimate the productivity effects of labor specialization using a judicial environment that offers a quasi-experimental setting well suited to this purpose. Judges in this environment are randomly assigned many differ...Read more...

CentrePiece article

Structured management: how firms can hire and keep the best people

Firms' decisions about whom to hire and fire have big effects, not only on their own bottom line but also on the functioning of the labour market and the performance of the whole economy. Analysis of Brazilian data by Da...Read more...

CEP discussion paper

Does employee happiness have an impact on productivity?

This article provides quasi-experimental evidence on the relationship between employee happiness and productivity in the field. We study the universe of call center sales workers at British Telecom (BT), one of the Unite...Read more...

Journal article

Journal of Macroeconomics:

Productivity growth, capital reallocation and the financial crisis: Evidence from Europe and the US

How has capital reallocation affected productivity growth since the financial crisis? For example, have low interest rates disrupted the reallocation process? This paper calculates the effect on productivity growth of ca...Read more...

Journal article

Journal of International Economics:

Geography, competition, and optimal multilateral trade policy

How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a mo...Read more...

CEP discussion paper

The best versus the rest: divergence across firms during the global productivity slowdown

We document that labor productivity of the globally most productive firms – the “frontier” – has diverged from all other firms – the “rest” – throughout the 2000s. This divergence remains after controlling for capital in...Read more...

CEP discussion paper

Building a productive workforce: the role of structured management practices

Firms’ hiring and firing decisions affect the entire labor market. Managers often make these decisions, yet the effects of management on labor allocation remains largely unexplored. To study the relationship between a fi...Read more...

Journal article

Journal of Economic Perspectives:

A Toolkit of Policies to Promote Innovation

Economic theory suggests that market economies are likely to underprovide innovation because of the public good nature of knowledge. Empirical evidence from the United States and other advanced economies supports this id...Read more...

Journal article

Journal of Political Economy:

CEO Behavior and Firm Performance

We measure the behavior of over 1,100 CEOs in six countries (Brazil, France, Germany, India, UK and US) using a new methodology that combines (i) a survey measuring each activity undertaken in a random work-week by the e...Read more...

CentrePiece article

Employee wellbeing: the impact on productivity and firm performance

Does having happier staff mean higher productivity and improvements in companies' bottom line? A study of over 1.8 million employees across 73 countries by Christian Krekel, George Ward and Jan-Emmanuel De Neve detects a...Read more...

CentrePiece article

Firm size, productivity and pay in today's service economy

The evidence that bigger firms pay higher wages and have higher productivity is based mainly on manufacturing, which is only a small share of today's economy. Giuseppe Berlingieri, Sara Calligaris and Chiara Criscuolo re...Read more...

CentrePiece article

Trade and deskilling: how the post-referendum sterling depreciation hurt workers

The unexpected result of the Brexit referendum, working through the rapid depreciation of sterling, had a sizable negative impact on UK workers. New CEP work by Rui Costa, Swati Dhingra and Stephen Machin shows that the ...Read more...

CEP Brexit analysis

Economic performance since the EU referendum

The impact of the Brexit vote can now begin to be evaluated with greater accuracy than previous forecasts, thanks to the emergence of new data. In the run-up to the UK’s referendum on membership of the European Union (EU...Read more...

CEP discussion paper

Innovative events

We take a fresh look at firms’ innovation-productivity linkages, using novel data capturing new aspects of innovative activity. We combine UK administrative microdata, media and website content to develop experimental me...Read more...

CEP discussion paper

Employee wellbeing, productivity and firm performance

Does higher employee wellbeing lead to higher productivity, and, ultimately, to tangible benefits to the bottom line of businesses? We survey the evidence and study this question in a meta-analysis of 339 independent res...Read more...

Journal article

International Journal of Industrial Organization:

Flex cars and competition in fuel retail markets

We study how the diffusion of flex (bi-fuel) cars affected competition on ethanol and gasoline retail markets. We propose a model of price competition in which the two fuels become closer substitutes as flex cars penetra...Read more...

Journal article

Review of Economic Studies:

Carry-along trade

Large multi-product firms dominate international trade flows. This paper documents new facts about multi-product manufacturing exporters that are not easily reconciled with existing multi-product models. Using novel link...Read more...

CentrePiece article

Sustainable growth in the UK

Anna Valero and colleagues urge the UK government to put action on climate change and sustainability at the heart of its growth strategy....Read more...

CEP discussion paper

The origins of firm heterogeneity: a production network approach

This paper quantifies the origins of firm size heterogeneity when firms are interconnected in a production network. Using the universe of buyer-supplier relationships in Belgium, the paper develops a set of stylized fact...Read more...

Journal article

American Economic Review:

Some causal effects of an industrial policy

We exploit changes in the area-specific eligibility criteria for a program to support jobs through investment subsidies. European rules determine whether an area is eligible for subsidies, and we construct instrumental v...Read more...

CEP industrial strategy paper

Sustainable growth in the UK: seizing opportunities from technological change and the transition to a low-carbon economy

An overarching strategy for sustainable growth is required to address the dual challenges of restoring productivity growth and managing a transition to a low-carbon economy – priorities in both the UK and other G20 count...Read more...

Journal article

Review of Economics and Statistics:

Robots at work

We analyze for the first time the economic contributions of modern industrial robots, which are flexible, versatile, and autonomous machines. We use novel panel data on robot adoption within industries in seventeen count...Read more...

CEP industrial strategy paper

Unlocking SME productivity: review of recent evidence and implications for the UK’s industrial strategy

Improving productivity is one of the main goals of the government's Industrial Strategy. Since the UK is a nation of small and medium-sized enterprises (SMEs), the question arises whether SMEs have a role to play in indu...Read more...

Submission to a parliamentary inquiry and government consultation

Business productivity review

The Business Productivity Review is the Department for Business, Energy and Industrial Strategy and HM Treasury response to the call for evidence. It outlines plans to spend £56 million to support business productivity, ...Read more...

Journal article

Economic Policy:

The productivity puzzle and misallocation: an Italian perspective

Productivity has recently slowed down in many economies around the world. A crucial challenge in understanding what lies behind this 'productivity puzzle' is the still short time span for which data can be analysed. An e...Read more...

CEP industrial strategy paper

Local Economic Effects of Brexit: Factsheet

Read more...

CEP discussion paper

Misallocation in the market for inputs: enforcement and the organization of production

The strength of contract enforcement determines how firms source inputs and organize production. Using microdata on Indian manufacturing plants, we show that production and sourcing decisions appear systematically distor...Read more...

Journal article

International Economics:

Relaxing credit constraints in emerging economies: The impact of public loans on the productivity of Brazilian manufacturers

In emerging economies credit constraints are often perceived as one of the most important market frictions hampering firm productivity growth in manufacturing. Huge amount of public money is devoted to the removal of suc...Read more...

CEP discussion paper

The productivity-wage premium: does size still matter in a service economy?

Ever since Moore (1911) a large empirical and theoretical literature has established the existence of a firm size-wage premium. At the same time, a second regularity in empirical work, linking size and productivity, has ...Read more...

CEP discussion paper

Financial markets and the allocation of capital: the role of productivity

The efficient allocation of credit is a key element for the success of an economy. Traditional measures of allocative efficiency focus on the Q-theory of investment and, in particular, on the elasticity of finance to inv...Read more...

CEP discussion paper

Managing trade: evidence from China and the US

We study how management practices shape export performance using matched production-trade-management data for Chinese and American firms and a randomized control trial in India. Better managed firms are more likely to ex...Read more...

CEP discussion paper

Have R&D spillovers changed?

This paper revisits the results of Bloom, Schankerman, and Van Reenen (2013) examining the impact of R&D on the performance of US firms, especially through spillovers. We extend their analysis to include an additional 15...Read more...

Journal article

Journal of Economic Geography:

Who gets the urban surplus?

High productivity in cities creates an economic surplus relative to other areas. How is this divided between workers and landowners? Simple models with homogenous labour suggest that it accrues largely-or entirely-in the...Read more...

CEP discussion paper

Temperature, labor reallocation and industrial production: evidence from India

To what degree can labor reallocation mitigate the economic consequences of weather-driven agricultural productivity shocks? I estimate that temperature-driven reductions in the demand for agricultural labor in India are...Read more...

CEP discussion paper

Networks and trade

Trade occurs between firms both across borders and within countries, and the vast majority of trade transactions includes at least one large firm with many trading partners. This paper reviews the literature on firm-to-f...Read more...

Journal article

Journal of International Economics:

Immigration, trade and productivity in services: Evidence from U.K. firms

This paper explores the impact of immigrants on the imports, exports and productivity of service-producing firms in the U.K. Immigrants may substitute for imported intermediate inputs (offshore production) and they may i...Read more...

Journal article

Journal of Economic Geography:

From periphery to core: Measuring agglomeration effects using high-speed rail

We analyze the economic impact of the German high-speed rail (HSR) connecting Cologne and Frankfurt, which provides plausibly exogenous variation in access to surrounding economic mass. We find a causal effect of about 8...Read more...

CentrePiece article

Family firms: the problem of second-generation bosses

Although family firms are widely praised as the ‘backbone of the economy’, their productivity is often hampered by weak management. Research by Daniela Scur and Renata Lemos provides new evidence on the performance of ‘d...Read more...

CentrePiece article

Poor productivity: an Italian perspective

Productivity growth has been slow in Western countries since the global financial crisis, but in Italy it has been stagnating for 25 years. Fadi Hassan and Gianmarco Ottaviano investigate inefficiency and misallocation i...Read more...

Blog

Vox EU:

Lost Einsteins: How exposure to innovation influences who becomes an inventor

Article by Alex Bell, Raj Chetty, Xavier Jaravel, Neviana Petkova and John Van Reenen: Relatively little is known about the factors that induce people to become inventors. Using data on the lives of over one million inv...Read more...

CEP discussion paper

The productivity puzzle and misallocation: an Italian perspective

Productivity has recently slowed down in many economies around the world. A crucial challenge in understanding what lies behind this \productivity puzzle" is the still short time span for which data can be analysed. An e...Read more...

Journal article

Research in Economics:

Efficiency in large markets with firm heterogeneity

Empirical work has drawn attention to the high degree of productivity differences within industries, and its role in resource allocation. In a benchmark monopolistically competitive economy, productivity differences intr...Read more...

CentrePiece article

Industry in Britain: an atlas

The UK’s financial services industry is not nearly as London-centric as the creative industries. Rather than the South East of England being the country’s productivity engine, it is a band stretching west from the capita...Read more...

CentrePiece article

The growing inequality between firms

Some firms pay well while others don’t; and some are highly productive while many aren’t. New research describes an emerging pattern of increasing inequality of wages and productivity between firms in the manufacturing a...Read more...

CEP discussion paper

Efficiency in large markets with firm heterogeneity

Abstract Empirical work has drawn attention to the high degree of productivity differences within industries, and its role in resource allocation. In a benchmark monopolistically competitive economy, productivity differe...Read more...

CEP report

Industry in Britain - an atlas

Living near a productive company can have considerable economic benefits. It means the chance of well-paid jobs, creates opportunities for suppliers of goods and services, and can be a boost to local retailers. This comm...Read more...

CEP discussion paper

Are ideas getting harder to find?

In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms: the effective number of researchers and their research productivity. We present a wide r...Read more...

Journal article

The Economic Journal:

My Precious! The Location and Diffusion of Scientific Research: Evidence from the Synchrotron Diamond Light Source

We analyse the impact of the establishment of the Diamond Light Source synchrotron, a large basic scientific research facility in the UK, on the geographic distribution of related research. To account for the potentially...Read more...

Journal article

Harvard Business Review:

Why do we undervalue competent management?

Business schools teach MBA students that you can't compete on the basis of management processes because they're easily copied. Operational effectiveness is table stakes in the competitive universe, according to the strat...Read more...

CentrePiece article

In brief... Road to recovery? Economic benefits of new infrastructure

New investment in roads can produce economic benefits, even in mature infrastructure networks like the UK’s, according to research by Henry Overman and colleagues. At the same time, they argue, improved evaluation of new...Read more...

CentrePiece article

Airports and economic performance in China

China’s airport construction policy has been successful in boosting manufacturing output, according to research by Stephen Gibbons and Wenjie Wu. Their study also finds that productivity impacts have been greater for pri...Read more...

CEP discussion paper

The great divergence(s)

This report provides new evidence on the increasing dispersion in wages and productivity using novel micro-aggregated firm-level data from 16 countries. First, the report documents an increase in wage and productivity di...Read more...

CEP election analysis

The UK's New Industrial Strategy

‘Industrial strategy’ has returned to the policy agenda, with the government recently setting out its plans in a Green Paper, and dedicated sections appearing in the election manifestos of all three main parties. Until r...Read more...

SERC/Urban and Spatial Programme Discussion Paper

New Road Infrastructure: The Effects on Firms

This paper estimates the impact of new road infrastructure on employment and labour productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured through changes in accessib...Read more...

Journal article

American Economic Review:

Is modern technology responsible for jobless recoveries?

Since the early 1990s, recoveries from recessions in the US have been plagued by weak employment growth. We investigate whether a similar problem afflicts other developed economies, and whether technology is a culprit. W...Read more...

Journal article

The Scandinavian Journal of Economics:

A Characteristics Approach to Optimal Taxation: Line Drawing and Tax-Driven Product Innovation

Real-world tax legislation assigns goods to different categories of tax rates on the basis of observable characteristics, allowing the tax system to handle a constantly evolving set of available goods. We recast the theo...Read more...

CEP discussion paper

What drives differences in management?

Partnering with the Census we implement a new survey of “structured” management practices in 32,000 US manufacturing plants. We find an enormous dispersion of management practices across plants, with 40% of this variatio...Read more...

Journal article

Journal of Urban Economics:

Sorting and agglomeration economies in French economics departments

Are agglomeration and peer effects at stake in academic research? To tackle this question, we study how departments’ characteristics affect the quantity and quality of academics’ publications in economics in France, cont...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Airports, Market Access and Local Economic Performance: Evidence from China

In this paper we study the effect of airports on local economic performance that arises from better access to domestic markets, using China’s recent rapid air network expansion. We estimate the effects of the implied cha...Read more...

Journal article

Journal of Urban Economics:

Spatial frictions

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We deve...Read more...

Journal article

The Economic Journal:

Tariffs, Trade and Productivity: A Quantitative Evaluation of Heterogeneous Firm Models

We examine the quantitative predictions of heterogeneous firm in the context of the Canada–US Free Trade Agreement (CUSFTA) of 1989. We compute predicted increases in trade flows and measured productivity and compare the...Read more...

CEP discussion paper

Colocation and knowledge diffusion: evidence from million dollar plants

This paper uses the entry of large corporations into U.S. counties during the 1980s and 1990s to analyse the effect of plant opening on knowledge spillovers to local inventors. We use a difference-in-differences identifi...Read more...

CEP discussion paper

Product mix and firm productivity responses to trade competition

We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their expo...Read more...

CEP Brexit analysis

BREXIT 2016: policy analysis from the Centre for Economic Performance

On June 23rd, the British people will vote in a referendum over whether or not to remain in the European Union. It is the most important vote that most of us will have in our lifetimes. And one that will have major reper...Read more...

CEP discussion paper

Production networks, geography and firm performance

This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for supp...Read more...

CentrePiece article

In brief... Management practices in Pakistan

For more than a decade, CEP economists have been leading efforts to get measures of management incorporated into the statistical infrastructure used by governments and researchers. The authors report on the latest initia...Read more...

CentrePiece article

Foreign investors love Britain - but Brexit would end the affair

Investment from overseas brings many benefits to the UK economy, including higher pay and productivity. According to CEP research, leaving the European Union could lead to a fall in inward foreign direct investment in th...Read more...

CEP discussion paper

Management as a technology?

Are some management practices akin to a technology that can explain firm and national productivity, or do they simply reflect contingent management styles? We collect data on core management practices from over 11,000 fi...Read more...

CEP discussion paper

Where does the wind blow? Green preferences and spatial misallocation in renewable energy sector

Are "greener" investments less efficient? This paper looks at the location choices by wind power investors. I measures the efficiency loss in this sector due to wrong project location and explore the factors contributing...Read more...

Journal article

Labour Economics:

Ill communication: technology, distraction and student performance

This paper investigates the impact of schools banning mobile phones on student test scores. By surveying schools in four English cities regarding their mobile phone policies and combining it with administrative data, we ...Read more...

CEP discussion paper

Management practices, workforce selection and productivity

Recent research suggests that much of the cross-firm variation in measured productivity is due to differences in use of advanced management practices. Many of these practices – including monitoring, goal setting, and the...Read more...

Journal article

The Quarterly Journal of Economics:

Dynamic selection: An idea flows theory of entry, trade, and growth

This article develops an idea flows theory of trade and growth with heterogeneous firms. Entrants learn from incumbent firms, and the diffusion technology is such that learning depends not on the frontier technology, but...Read more...

CEP discussion paper

Unraveling firms: demand, productivity and markups heterogeneity

We develop a novel framework that simultaneously allows recovering heterogeneity in demand, quantity TFP and markups across firms while leaving the correlation between the three dimensions unrestricted. We accomplish thi...Read more...

Journal article

The Review of Economic Studies:

Trade induced technical change? The impact of Chinese imports on innovation, IT and productivity

We examine the impact of Chinese import competition on broad measures of technical change - patenting, IT, and TFP - using new panel data across twelve European countries from 1996 to 2007. In particular, we establish th...Read more...

CEP discussion paper

Productivity and organization in Portuguese firms

The productivity of firms is, at least partly, determined by a firm's actions and decisions. One of these decisions involves the organization of production in terms of the number of layers of management the firm decides ...Read more...

CentrePiece article

Wage stagnation and the legacy costs of employment

Although UK real wages have been stagnant for over a decade, there has been a notable increase in nonwage compensation. But as Brian Bell reveals, this rise consists largely of special payments to fund deficit gaps in '...Read more...

CentrePiece article

Healthcare: how competition can improve management quality and save lives

NHS hospitals in England are rarely closed in constituencies where the governing party has a slender majority. This means that for near random reasons, those parts of the country have more competition in healthcare - whi...Read more...

CEP discussion paper

The impact of contract enforcement costs on outsourcing and aggregate productivity

Legal institutions affect economic outcomes, but how much? This paper documents how costly supplier contract enforcement shapes firm boundaries, and quantifies the impact of this transaction cost on aggregate productivit...Read more...

Submission to a parliamentary inquiry and government consultation

BIS - Productivity Plan inquiry

Read more...

CentrePiece article

Family business: management effort and firm performance

Might familyowned, familyrun firms be a serious obstacle to productivity growth in Europe? Oriana Bandiera, Andrea Prat and Raffaella Sadun have collected time use data on over 1,000 chief executive officers to explore d...Read more...

CentrePiece article

In brief... Phone home: should mobiles be banned in schools?

Louis-Philippe Beland and Richard Murphy look at the impact of mobile phone bans on pupils' academic achievement in four cities in England....Read more...

CentrePiece article

Robots at work: the impact on productivity and jobs

Robots may seem dangerous not only to cinema action heroes but also to the average manufacturing worker.To assess whether such concerns are well founded, Guy Michaels and Georg Graetz analyse the labour market effects of...Read more...

SERC/Urban and Spatial Programme Discussion Paper

What Makes Cities More Productive? Agglomeration Economies and the Role of Urban Governance: Evidence from 5 OECD Countries

This paper estimates agglomeration benefits across five OECD countries, and represents the first empirical analysis that combines evidence on agglomeration benefits and the productivity impact of metropolitan governance ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Spillovers from Immigrant Diversity in Cities

Using comprehensive longitudinal matched employer-employee data for the U.S.,this paper provides new evidence on the relationship between productivity and immigration-spawned urban diversity. Existing empirical work has ...Read more...

CEP occasional paper

The UK's productivity puzzle

The 2008 Great Recession was notable in the UK for three things: the enormity of the output shock; the muted unemployment response; and the very slow rate of recovery. We review the literature which finds most of the dec...Read more...

CEP discussion paper

Firming up inequality

Earnings inequality in the United States has increased rapidly over the last three decades, but little is known about the role of firms in this trend. For example, how much of the rise in earnings inequality can be attri...Read more...

CEP discussion paper

Ill communication: technology, distraction and student performance

This paper investigates the impact of schools banning mobile phones on student test scores. By surveying schools in four English cities regarding their mobile phone policies and combining it with administrative data, we ...Read more...

CEP election analysis

#ElectionEconomics: The Research Evidence on Key Issues for Voters in the 2015 UK General Election

Please see the CEP #ElectionEconomics report(Paper 1)and the Executive Summary (Paper 2) that cover all the election 2015 briefings, discussing the research evidence on 15 of the UK's key policy battlegrounds: immigratio...Read more...

CEP election analysis

Productivity and Business Policies

UK productivity stagnated after the Great Recession of 2008-09 and remains about 15 percent below historical trends. This 'productivity puzzle' is due to a mixture of cyclical and structural effects - the fall is not ent...Read more...

CEP election analysis

Austerity: Growth Costs and Post-Election Plans

The austerity programme of the coalition government knocked at least one percent per year off growth in the first two years of this Parliament. In retrospect, this looks like a mistake and the slower pace of austerity in...Read more...

CEP discussion paper

Robots at work

Despite ubiquitous discussions of robots’ potential impact, there is almost no systematic empirical evidence on their economic effects. In this paper we analyze for the first time the economic impact of industrial robots...Read more...

CEP discussion paper

The roles of import competition and export opportunities for technical change

A variety of empirical and theoretical trade papers have suggested and documented a positive impact of trade on the productivity of firms. However, there is less consensus about the underlying mechanism at work. While tr...Read more...

CEP discussion paper

All-star or benchwarmer? Relative age, cohort size and career success in the NHL

We analyze the performance outcomes of National Hockey League (NHL) players over 18 seasons (1990-1991 to 2007-2008) as a function of the demographic conditions into which they were born. We have three main findings. Fir...Read more...

CEP discussion paper

Making do with less: working harder during recessions

Why did productivity rise during recent recessions? One possibility is that average worker quality increased. A second is that each incumbent worker produced more. The second effect is termed “making do with less.” Using...Read more...

CEP discussion paper

The value of bosses

How and by how much do supervisors enhance worker productivity? Using a company-based data set on the productivity of technology-based services workers, supervisor effects are estimated and found to be large. Replacing a...Read more...

CEP discussion paper

It's where you work: increases in earnings dispersion across establishments and individuals in the US

This paper links data on establishments and individuals to analyze the role of establishments in the increase in inequality that has become a central topic in economic analysis and policy debate. It decomposes changes in...Read more...

CEP discussion paper

Relaxing credit constraints in emerging economies: the impact of public loans on the performance of Brazilian manufacturers

n emerging economies credit constraints are often perceived as one of the most important market frictions hampering firm innovation and productivity growth in manufacturing. Huge amounts of public money are devoted to th...Read more...

CEP discussion paper

Immigration, diversity and the labour market outcomes of native workers: some recent developments

This brief essay provides a selective discussion of how in recent years economists in the neoclassical tradition have addressed the questions whether and how immigration affects native workers’ labour market outcomes. In...Read more...

CentrePiece article

In brief... Management in America

There are strong links between the performance of US manufacturing plants and the quality of their systems of monitoring, targets and incentives, according to research by Professor Nicholas Bloom and colleagues. Their an...Read more...

CEP occasional paper

The new empirical economics of management

Over the last decade the World Management Survey (WMS) has collected firm-level management practices data across multiple sectors and countries. We developed the survey to try to explain the large and persistent TFP diff...Read more...

CEP discussion paper

IT and management in America

The Census Bureau recently conducted a survey of management practices in over 30,000 plants across the US, the first large-scale survey of management in America. Analyzing these data reveals several striking results. Fir...Read more...

CentrePiece article

In brief... Mrs Thatcher's industrial legacy

John Van Reenen examines the 'unbalancing' of Britain's economy away from manufacturing since 1979....Read more...

CEP discussion paper

Missing gains from trade?

The theoretical result that there are welfare gains from trade is a central tenet of international economics. In a class of trade models that satisfy a 'gravity equation,' the welfare gains from trade can be computed usi...Read more...

CEP discussion paper

Managing the family firm: evidence from CEOs at work

We present evidence on the labor supply of CEOs, and on whether family and professional CEOs differ on this dimension. We do so through a new survey instrument that allows us to codify CEOs’ diaries in a detailed and com...Read more...

CentrePiece article

Wage growth and productivity growth: the myth and reality of 'decoupling'

Employees in the UK are not being denied their fair share of economic growth, according to research by João Paulo Pessoa and John Van Reenen. Their investigation of claims that wage growth has become ‘decoupled’ from pro...Read more...

CEP discussion paper

Decoupling of wage growth and productivity growth? Myth and reality

It is widely believed that in the US wage growth has fallen massively behind productivity growth. Recently, it has also been suggested that the UK is starting to follow the same path. Analysts point to the much faster gr...Read more...

CEP occasional paper

Medium and long run prospects for UK growth in the aftermath of the financial crisis

The productivity performance of the UK economy in the period 1990-2007 was excellent. Based entirely on pre-crisis data, and using a two-sector growth model, I project the future growth rate of GDP per hour in the market...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Land Use Regulation and Productivity - Land Matters: Evidence from a UK Supermarket Chain

We use store-specific data for a UK supermarket chain to estimate the impact of planning on store output. Exploiting the variation in policies between England and other UK countries, we isolate the impact of Town Centre ...Read more...

CentrePiece article

Bad management: a constraint on economic development?

Are poor management practices holding back middle-income countries? The authors look at evidence for private firms and public organisations in India - in manufacturing, retail, healthcare and education....Read more...

CEP report

The UK productivity and jobs puzzle: does the answer lie in labour market flexibility?

GDP per worker fell for the five years after 2008 which is unprecedented in post war UK history. In this paper we argue that “capital shallowing” (i.e. the fall in the capital-labour ratio) could be the main reason for t...Read more...

CEP discussion paper

Innovation, reallocation and growth

We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovat...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Do Large Departments Make Academics More Productive? Agglomeration and Peer Effects in Research

We study the effect of a large set of department characteristics on individual publication records. We control for many individual time-varying characteristics, individual fixed-effects and reverse causality. Department ...Read more...

CEP discussion paper

Does Working from Home Work? Evidence from a Chinese Experiment

About 10% of US employees now regularly work from home (WFH), but there are concerns this can lead to “shirking from home.” We report the results of a WFH experiment at CTrip, a 16,000-employee, NASDAQ-listed Chinese tra...Read more...

CEP discussion paper

What are the Channels for Technology Sourcing? Panel Data Evidence from German Companies

Innovation processes within corporations increasingly tap into international technology sources, yet little is known about the relative contribution of different types of innovation channels. We investigate the effective...Read more...

Journal article

The Quarterly Journal of Economics:

Does management matter? Evidence from India

A long-standing question is whether differences in management practices across firms can explain differences in productivity, especially in developing countries where these spreads appear particularly large. To investiga...Read more...

CEP discussion paper

Long and Short-Term Effects of the Financial Crisis on Labour Productivity, Capital and Output

The behaviour of labour productivity in the United Kingdom since the onset of the recession in early 2008 constitutes a puzzle. Over four years after the recession began labour productivity is still below its previous pe...Read more...

CEP discussion paper

Heterogeneous Firms and Trade

This paper reviews the new approach to international trade based on firm heterogeneity in differentiated product markets. This approach explains a variety of features exhibited in disaggregated trade data, including the ...Read more...

CentrePiece article

Sexism at work

Women have, on average, been less well-paid than men throughout history. Prior to 1900, most economic historians see the gender wage gap as a reflection of men’s greater strength and correspondingly higher productivity. ...Read more...

CentrePiece article

Working or shirking?

Over 10% of US employees now regularly work from home (WFH), but there is widespread skepticism over its impact highlighted by phrases like “shirking from home”. We report the results of a WFH experiment at Ctrip, a 13,0...Read more...

CEP discussion paper

Productivity As If Space Mattered: An Application to Factor Markets Across China

Optimal production decisions depend on local market characteristics. This paper develops a model to explain firm labor demand and firm density across regions. Firms vary in their technology to combine imperfectly substit...Read more...

SERC/Urban and Spatial Programme Discussion Paper

New Road Infrastructure: the Effects on Firms

This paper estimates the impact of road improvements on firm employment and productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured by changes in employment accessibil...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Total Factor Productivity Growth in Local Economic Partnership Regions in Britain, 1997-2008

This paper decomposes aggregate TFP growth in Britain for 1997-2008 to show the contribution of different LEPs and the role played by manufacturing and services and UK- and foreign-owned plants within these LEPs. These c...Read more...

CentrePiece article

In brief... Two cheers for Anglo-Saxon financial markets?

We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nes...Read more...

CentrePiece article

In brief... Can industrial policy boost jobs?

Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific el...Read more...

CentrePiece article

Growth and productivity: UK economic performance since 1997

A common view is that the performance of the UK economy between 1997 and 2010 under Labour was very weak and that the current economic problems are a consequence of poor policies in this period. In this report, we analys...Read more...

CEP discussion paper

The Allocation of Talent over the Business Cycle and its Effect on Sectoral Productivity

It is well documented that graduates enter different occupations in recessions than in booms. In this article, we examine the impact of this reallocation for long-term productivity and output across sectors. We develop a...Read more...

CEP discussion paper

Span of Control and Span of Activity

For both practitioners and researchers, span of control plays an important role in defining and understanding the role of the CEO. In this paper, we combine organizational chart information for a sample of 65 companies w...Read more...

CEP discussion paper

Why Are Migrants Paid More?

In efficient global labour markets for very high wage workers one might expect wage differentials between migrant and domestic workers to reflect differences in labour productivity. However, using panel data on worker-fi...Read more...

CEP discussion paper

The Impact of Integration on Productivity and Welfare Distortions Under Monopolistic Competition

A fundamental question in monopolistic competition theory is whether the market allocates resources efficiently. This paper generalizes the Spence-Dixit-Stiglitz framework to heterogeneous firms, addressing when the mark...Read more...

CEP discussion paper

Firm Size Distortions and the Productivity Distribution: Evidence from France

We show how size-contingent laws can be used to identify the equilibrium and welfare effects of labor regulation. Our framework incorporates such regulations into the Lucas (1978) model and applies it to France where man...Read more...

CEP discussion paper

Why Has China Grown So Fast? The Role of International Technology Transfer

Chinese economic growth has been spectacular in the last 30 years. We investigate the role of International Joint Ventures with Technology Transfer agreements, an understudied area. Technology transfer is the traditional...Read more...

Journal article

American Economic Review:

Americans do IT better: US multinationals and the productivity miracle

US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in ...Read more...

CEP discussion paper

Some Causal Effects of an Industrial Policy

Business support policies designed to raise employment and productivity are ubiquitous around the world. We exploit changes in the area-specific eligibility criteria for a major program to support manufacturing jobs thro...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Causal Effects of an Industrial Policy

Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific el...Read more...

CEP discussion paper

Management Practices Across Firms and Countries

For the last decade we have been using double-blind survey techniques and randomized sampling to construct management data on over 10,000 organizations across twenty countries. On average, we find that in manufacturing A...Read more...

CEP discussion paper

Spatial Frictions

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We deve...Read more...

CEP discussion paper

Assignment Reversals: Trade, Skill Allocation and Wage Inequality

Understanding the allocation of skilled labor across industries is necessary to explain inter-industry wage differences and the effect of trade on wages. This paper develops a multi-sector assignment model with both hete...Read more...

CEP report

UK economic performance since 1997: growth, productivity and jobs

A common view is that the performance of the UK economy between 1997 and 2010 under Labour was very weak and that the current economic problems are a consequence of poor policies in this period. In this report, we analys...Read more...

CEP discussion paper

The Empirics of Firm Heterogeneity and International Trade

This paper reviews the empirical evidence on firm heterogeneity in international trade. A first wave of empirical findings from micro data on plants and firms proposed challenges for existing models of inter- national tr...Read more...

CEP discussion paper

Productivity, Wages and Marriage: The Case of Major League Baseball

The effect of marriage on productivity and, consequently, wages has been long debated in economics. A primary explanation for the impact of marriage on wages has been through its impact on productivity, however, there ha...Read more...

CentrePiece article

Land use planning: the impact on retail productivity

The restrictions that planning policies impose on retail development have significantly reduced the productivity of supermarkets, according to Paul Cheshire and colleagues....Read more...

CentrePiece article

Big ideas: How competition improves management and productivity

John Van Reenen sketches the evolution of CEP research on the drivers of productivity growth - and its impact on policies to foster competition....Read more...

CEP discussion paper

Gender, Productivity and the Nature of Work and Pay: Evidence from the Late Nineteenth-Century Tobacco Industry

Women have, on average, been less well-paid than men throughout history. Prior to 1900, most economic historians see the gender wage gap as a reflection of men’s greater strength and correspondingly higher productivity. ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices

British cities are becoming more culturally diverse, with migration a main driver. Is this growing diversity good for urban economies? This paper explores, using a new 16-year panel of UK cities. Over time, net migration...Read more...

CEP discussion paper

Does Management Matter? Evidence from India

A long-standing question in social science is to what extent differences in management cause differences in firm performance. To investigate this we ran a management field experiment on large Indian textile firms. We pro...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Evaluating the Effects of Planning Policies on the Retail Sector: Or do Town Centre First Policies Deliver the Goods?

Few studies conceive of land as a productive factor but British land use policies may lower total factor productivity (TFP) in the retailing industry by (i) restricting the total availability of land for retail, thereby ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Plant-level Determinants of Total Factor Productivity in Great Britain, 1997-2006

This paper examines the determinants of total factor productivity (TFP) using a GB plant-level dataset. Using a systems-GMM approach, it considers the role of the following four plant characteristics: internal and extern...Read more...

Book

The Comingled Code
Open Source and Economic Development

Discussions of the economic impact of open source software often generate more heat than light. Advocates passionately assert the benefits of open source while critics decry its effects. Missing from the debate is ri...Read more...

CEP discussion paper

Does Competition Raise Productivity Through Improving Management Quality?

A classic question in industrial organization is whether competition raises productivity and if so, through what mechanism? I discuss recent empirical evidence from both large-scale databases and specific industries whic...Read more...

CentrePiece article

The shrinking middle

Guy Michaels and colleagues show how new technologies are polarising the labour market, with the middle-skilled losing out most...Read more...

CEP discussion paper

Long Term Implications of the ICT Revolution: Applying the Lessons of Growth Theory and Growth Accounting

How big a boost to long run growth can countries expect from the ICT revolution? I use the results of growth accounting and the insights from a two-sector growth model to answer this question. The use of a two-sector rat...Read more...

CEP discussion paper

Do Salaries Improve Worker Performance?

We establish the effects of salaries on worker performance by exploiting a natural experiment in which some workers in a particular occupation (football referees) switch from short-term contracts to salaried contracts. W...Read more...

Book

The Future of Finance
The LSE Report

This book presents a novel approach to the reform of the world’s financial system, starting with the basic question, what is a financial system for? It shows that the existing system has become far more complic...Read more...

CEP discussion paper

Productivity Spreads, Market Power Spreads and Trade

Much of recent Trade theory focuses on heterogeneity of firms and the differential impact trade policy might have on firms with different levels of productivity. A common problem is that most firm level dataset do not co...Read more...

CEP discussion paper

The Impact of Competition on Management Quality: Evidence from Public Hospitals

We analyze the causal impact of competition on managerial quality (and hospital performance). To address the endogeneity of market structure we analyze the English public hospital sector where entry and exit are controll...Read more...

CEP discussion paper

Human Resource Management and Productivity

In this chapter we examine the relationship between Human Resource Management (HRM) and productivity. HRM includes incentive pay (individual and group) as well as many nonpay aspects of the employment relationship such a...Read more...

Journal article

Journal of Political Economy:

Can pay regulation kill? Panel data evidence on the effect of labor markets on hospital performance

In many sectors, pay is regulated to be equal across heterogeneous geographical labor markets. When the competitive outside wage is higher than the regulated wage, there are likely to be falls in quality. We exploit pane...Read more...

CEP election analysis

Health: Higher Spending has Improved Quality, But Productivity Must Increase

Read more...

CEP discussion paper

Recent Advances in the Empirics of Organizational Economics

We present a survey of recent contributions in the empirical organizational economics, focusing on management practices and decentralization. Productivity dispersion between firms and countries has motivated the improved...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Agglomeration Elasticities and Firm Heterogeneity

This paper estimates the relationship between agglomeration and multi factor productivity at the one digit industry level and by region using longitudinal firm level data for New Zealand. A key focus of the paper is on m...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Productivity and Firm Selection: Quantifying the 'New' Gains from Trade

We discuss how standard computable equilibrium models of trade policy can be enriched with selection effects without missing other important channels of adjustment. This is achieved by estimating and simulating a partial...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection

Firms are more productive on average in larger cities. Two explanations have been offered: agglomeration economies (larger cities promote interactions that increase productivity) and firm selection (larger cities toughen...Read more...

CEP discussion paper

How to Measure Living Standards and Productivity

This paper sets out a general algorithm for calculating true cost-of-living indices or true producer price indices when demand is not homothetic, i.e. when not all expenditure elasticities are equal to one. In principle,...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Analysing the Impact of Public Capital Stock Using the NEG Wage Equation: A Panel Data Approach

This paper examines the relationship between the level of public infrastructure and the level of productivity using panel data for the Spanish provinces over the period 1984-2004, a period which is particularly relevant ...Read more...

CEP discussion paper

Employee Voice and Private Sector Workplace Outcomes in Britain, 1980-2004

Non-union direct voice has replaced union representative voice as the primary avenue for employee voice in the British private sector. This paper provides a framework for examining the relationship between employee voice...Read more...

CEP discussion paper

Convergence of Firm-Level Productivity, Globalisation, Information Technology and Competition: Evidence from France

Studies of firm-level data have shown that there is a huge dispersion of productivity across firms even when industries are narrowly defined. So there is a significant opportunity for the least productive firms to catch ...Read more...

CEP discussion paper

Accounting for Research and Productivity Growth Across Industries

What factors underlie industry differences in research intensity and productivity growth? We develop a multi-sector endogenous growth model allowing for industry specific parameters in the production functions for output...Read more...

CEP discussion paper

Innovation and institutional ownership

We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nes...Read more...

CEP discussion paper

The Macroeconomic Role of Unemployment Compensation

The standard motivation for unemployment compensation is consumption smoothing and most papers in the literature have analyzed trade-offs involving consumption smoothing and moral hazard. This paper shows how such policy...Read more...

CEP discussion paper

Modern Management: Good for the Environment or Just Hot Air?

We use an innovative methodology to measure management practices in over 300 manufacturing firms in the UK. We then match this management data to production and energy usage information for establishments owned by these ...Read more...

CEP discussion paper

How Does Shared Capitalism Affect Economic Performance in the UK?

This paper uses nationally representative linked workplace-employee data from the British 2004 Workplace Employment Relations Survey to examine the operation of shared capitalist forms of pay – profit-sharing and group p...Read more...

CEP discussion paper

Trading Places: Employers, Unions and the Manufacture of Voice

Using nationally representative workplace data for Britain we show that over the last quarter century union voice – especially union-only voice – has been associated with poorer climate, more industrial action, poorer fi...Read more...

CEP discussion paper

Can Pay Regulation Kill? Panel Data Evidence on the Effect of Labor Markets on Hospital Performance

Labor market regulation can have harmful unintended consequences. In many markets, especially for public sector workers, pay is regulated to be the same for individuals across heterogeneous geographical labor markets. We...Read more...

CEP discussion paper

Productivity and the Sourcing Modes of Multinational Firms: Evidence from French Firm-Level Data

We investigate the role of a firm’s total factor productivity in its decision to import from their affiliates rather than from independent input suppliers. We propose a slightly modified version of the Antràs and Helpman...Read more...

Journal article

The Quarterly Journal of Economics:

Measuring and explaining management practices across firms and countries

We use an innovative survey tool to collect management practice data from 732 medium-sized firms in the United States, France, Germany, and the United Kingdom. These measures of managerial practice are strongly associate...Read more...

CEP discussion paper

Information Technology, Organization, and Productivity in the Public Sector: Evidence from Police Departments

We examine how information technology (IT) contributes to organizational change, labor demand, and improved productivity in the public sector using a new panel data set of police departments covering 1987-2003. While IT ...Read more...

CEP discussion paper

The Shimer Puzzle and the Correct Identification of Productivity Shocks

Shimer (2005a) claims that the Mortensen-Pissarides search model of unemployment lacks an ampiflication mechanism because it cannot generate the observed business cycle fluctuations in unemployment given labor productivi...Read more...

CEP discussion paper

The Evolution of Inequality in Productivity and Wages: Panel Data Evidence

There has been a remarkable increase in wage inequality in the US, UK and many other countries over the past three decades. A significant part of this appears to be within observable groups (such as age-gender-skill cell...Read more...

CEP discussion paper

Productivity, Aggregate Demand and Unemployment Fluctuations

This paper presents new empirical evidence on the cyclical behavior of US unemployment that poses a challenge to standard search and matching models. The correlation between cyclical unemployment and the cyclical compone...Read more...

CEP discussion paper

Measuring Organization Capital in Japan: An Empirical Assessment Using Firm-Level Data

Globalization and the ICT revolution of the 1990s have forced many firms to reorganize in order to survive in a more competitive market. There are several approaches that can be used to assess the measurement of organiza...Read more...

CEP discussion paper

Trade Liberalization, Outsourcing, and Firm Productivity

Empirical evidence suggests that trade liberalization increases firm productivity. This paper offers a novel explanation for this finding. I develop a simple general equilibrium model of trade in which trade liberalizati...Read more...

Manpower Human Resource Lab paper

Are There Day of the Week Productivity Effects?

Despite much debate about the productivity effects of flexible working and the regulation of working hours little attention is paid to temporal variance in productivity. This paper explains why one might expect to see pr...Read more...

CEP discussion paper

Imports and Exports at the Level of the Firm: Evidence from Belgium

This paper explores a newly-available panel data set merging balance sheet and international trade transaction data for Belgium. Both imports and exports appear to be highly concentrated among few firms and seem to have ...Read more...

Manpower Human Resource Lab paper

Temporary Agency Workers and Workplace Performance in the Private Sector

Using nationally representative workplace data we identify the correlates of temporary agency working (TAW) in the private sector in Britain and its association with workplace labour productivity and financial performanc...Read more...

CEP discussion paper

Americans Do I.T. Better: US Multinationals and the Productivity Miracle

The US has experienced a sustained increase in productivity growth since the mid-1990s, particularly in sectors that intensively use information technologies (IT). This has not occurred in Europe. If the US “productivity...Read more...

CEP discussion paper

Productivity Growth, Knowledge Flows and Spillovers

This paper explores the role of knowledge flows and TFP growth by using direct survey data on knowledge flows linked to firm-level TFP growth data. Our knowledge flow data correspond to the kind of information flows ofte...Read more...

CEP discussion paper

Information Technology, Organisational Change and Productivity Growth: Evidence from UK Firms

We examine the relationships between productivity growth, IT investment and organisational change (?O) using UK firm data. Consistent with the small number of other micro studies we find (a) IT appears to have high retur...Read more...

CEP discussion paper

Shifts in Economic Geography and their Causes

This paper analyses some of the forces that are changing the spatial distribution of activity in the world economy. It draws on the 'new economic geography' literature to argue the importance of increasing returns to sca...Read more...

CEP discussion paper

An R&D-Based Model of Multi-Sector Growth

We develop a multi-sector general equilibrium model in which productivity growth is driven by the production of sector-specific knowledge. In the model, we find that long run differences in total factor productivity grow...Read more...

CEP discussion paper

Unemployment and Hours of Work: The North Atlantic Divide Revisited

I examine the dynamic evolutions of unemployment, hours of work and the service share since the war in the United States and Europe. The theoretical model brings together all three and emphasizes technological growth. Co...Read more...

CEP discussion paper

Productivity and ICT: A Review of the Evidence

We survey the micro and macro literature on the impact of Information and Communication Technologies (ICTs) on productivity. The “Solow Paradox” of the absence of an impact of ICT on productivity no longer holds, if it e...Read more...

CEP discussion paper

Productivity, Exporting and the Learning-by-Exporting Hypothesis: Direct Evidence from UK Firms

Case study evidence suggests that exporting firms learn from their clients. But econometric evidence, mostly using exporting and TFP growth, is mixed. We use a UK panel data set with firm-level information on exporting a...Read more...

CEP discussion paper

Measuring and Explaining Management Practices Across Firms and Countries

We use an innovative survey tool to collect management practice data from 732 medium sized manufacturing firms in the US, France, Germany and the UK. These measures of managerial practice are strongly associated with fir...Read more...

CEP report

Work-Life Balance, Management Practices and Productivity

Do “Anglo-Saxon” management practices generate higher productivity only at the expense of lousy work-life balance (WLB) for workers? Many critics of “neo-libéralisme sauvage” have argued that increased competition from g...Read more...

CEP discussion paper

Products and Productivity

Firms' decisions about which goods to produce are often made at a more disaggregate level than the data observed by empirical researchers. When products differ according to production technique or the way in which they e...Read more...

CEP discussion paper

Productivity Dispersion, Competition and Productivity Measurement

A startling fact of firm level productivity analysis is the large and persistent differences in both labour productivity and total factor productivity (TFP) between firms in narrowly defined sectoral classes. The competi...Read more...

CEP discussion paper

New Survey Evidence on Recent Changes in UK Union Recognition

This paper reports results from a recent survey we conducted on the union status of over 650 firms in the private sector of the UK. Compared to earlier periods, the survey shows that since 1997 there has been a slight fa...Read more...

CEP discussion paper

Productivity Growth and the Role of ICT in the United Kingdom: An Industry View, 1970-2000

We use a new industry-level dataset to quantify the role of ICT in explaining productivity growth in the UK, 1970-2000. The dataset is for 34 industries covering the whole economy (31 in the market sector). Using growth ...Read more...

CEP discussion paper

Identifying Technology Spillovers and Product Market Rivalry

The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing “spill...Read more...

CEP discussion paper

The Impact of Training on Productivity and Wages: Evidence from British Panel Data

It is standard in the literature on training to use wages as a sufficient statistic for productivity. But there are many reasons why wages and productivity may diverge. This paper is part of a smaller literature on the e...Read more...

CEP discussion paper

Multinationals and US Productivity Leadership: Evidence from Great Britain

We study the productivity of US owned plants in the UK. Using a new dataset that identifies foreign and domestic MNEs, we find that UK MNEs are less productive than US affiliates, but as productive as non US foreign affi...Read more...

CEP discussion paper

Is Poland the Next Spain?

We revisit Western Europe’s record with labor-productivity convergence, and tentatively extrapolate its implications for the future path of Eastern Europe. The poorer Western European countries caught up with the richer ...Read more...

CEP discussion paper

How Special is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing

How much does US-based R&D benefit other countries and through what mechanisms? We test the 'technology sourcing' hypothesis that foreign research labs located on US soil tap into US R&D spillovers and improve home count...Read more...

CEP discussion paper

Globalisation, ICT and the Nitty Gritty of Plant Level Datasets

The net entry contribution to aggregate productivity growth has increased dramatically in the UK over 1990s according to calculations based on data from the Annual Respondents Database (ARD). Some recent studies have tri...Read more...

CEP discussion paper

Evaluating Urban Transport Improvements: Cost Benefit Analysis in the Presence of Agglomeration and Income Taxation

There is a substantial empirical literature quantifying the positive relationship between city size and productivity. The paper draws out the implications of this productivity relationship for evaluations of urban transp...Read more...

CEP discussion paper

Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab

This paper examines the relationship between foreign ownership and productivity, paying particular attention to two issues neglected in the existing literature – the role of multinationals in service sectors and the impo...Read more...

CEP discussion paper

Cities, Matching and the Productivity Gains of Agglomeration

The striking geographical concentration of economic activities suggests that there are substantial benefits to agglomeration. However, the nature of those benefits remains unclear. In this paper we take advantage of a ne...Read more...

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 occ...Read more...

CEP discussion paper

A Statistical Framework for the Analysis of Productivity and Sustainable Development

To analyse the consequences of the changing economic structure of the UK, we need a set of statistics broken down by industry that are consistent with the whole economy measures available from the national accounts. The ...Read more...

CEP discussion paper

Balanced Growth With Structural Change

We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of a balanced aggregate growth path, with all aggregates growing at the sam...Read more...

CEP discussion paper

Organizational Climate and Company Productivity: the Role of Employee Affect and Employee Level

Consistent with a growing number of models about affect and behaviour and with a recognition that perception alone provides no impetus for action, it was predicted that associations between company climate and productivi...Read more...

CEP discussion paper

Do Organisational Climate and Strategic Orientation Moderate the Relationship Between Human Resource Management Practices and Productivity?

Contingency formulations of Human Resource Management (HRM) theory suggest that the effectiveness of HRM practices should vary across firms. This study examined whether the relationship between HRM practices and producti...Read more...

CEP discussion paper

Corporate R&D and Productivity in Germany and the United Kingdom

This paper analyzes differences in R&D spending and in the impact of R&D on productivity between German and UK firms. We confirm that German firms spend significantly larger amounts on R&D than their UK counterparts, eve...Read more...

CEP discussion paper

The Hidden Costs of Fixed Term Contracts: the Impact On Work Accidents

This paper assesses whether there is a systematic difference between the accident rates of fixed term and permanent contract workers that is not just the result of a compositional effect. A pure contractual effect might ...Read more...

CEP discussion paper

Unions and Productivity, Financial Performance and Investment: International Evidence

If the presence of a union in a workplace or firm raises the pay level, unless productivity rises correspondingly, financial performance is likely to be worse. If the product market is uncompetitive this might imply a si...Read more...

CEP discussion paper

Technology Dissemination and Economic Growth: Some Lessons for the New Economy

This paper attempts to draw lessons for the New Economy from what economists know about technology dissemination and economic growth. It argues that what is most notable about the New Economy is that it is knowledge-driv...Read more...

CEP discussion paper

Measuring the Cost Effectiveness of an R&D Tax Credit for the UK

This paper investigates the economic impact of the government's proposed new UK R&D tax credit. We measure the benefit of the credit by the effect on value added in the short and long?run. This is simulated from existin...Read more...

CEP discussion paper

Technological Innovation and Performance in the United Kingdom

Over the period since 1970, Britain has improved its relative productivity performance, but there remains a significant gap in market sector productivity between Britain and both Continental Europe and the United States....Read more...

CEP discussion paper

Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries

Many writers have claimed that R&D has two 'faces'. In addition to the conventional role of stimulating innovation, R&D enhances technology transfer by improving the ability of firms to learn about advances in the lead...Read more...

Journal article

Journal of Political Economy:

Competition and corporate performance

Are people right to think that competition improves corporate performance? My investigations indicate first that there are some theoretical reasons for believing this hypothesis to be correct, but they are not overwhelmi...Read more...