An empirical analysis of productivity growth in retail services: evidence from Spain

Abstract

PurposeThis paper seeks to estimate total productivity change in retailing firms and to decompose it into efficiency change and technical change (TC) (i.e. the consequence of innovation and adoption of new technologies).Design/methodology/approachThis paper adopts the efficient approach using the Malmquist productivity index for a sample of 96 supermarket chains operating in Spain between 1995 and 2003.FindingsThe results show a slight increase in average annual productivity among the firms analysed.Research limitations/implicationsThe generalisation of the conclusions of the study to the whole sector should be made with caution, because only one of the players in the distribution channel has been analysed.Practical implicationsIt is shown that the main component of productivity change is TC. This result means that new ICTs have the capacity to alter the productive structures of retail firms, favouring their productivity.Originality/valueThe contribution of this paper is based on the application of the Malmquist index to evaluate productivity in the service sector.