The geographical dimension of productivity in Great Britain, 2011–18: the sources of the London productivity advantage

Abstract

ABSTRACT The UK government has committed to ‘levelling up’ regional economic performance. Through deriving geographically disaggregated estimates of total factor productivity from plant-level data, we show that the productivity advantage of London is far greater than differences between other regions. Evidence is then provided on the extent to which differences in multinational ownership, trade involvement, enterprise structure, plant age, research and development, subsidization, size, and industrial structure explain the London productivity advantage. Less than half can be explained by these characteristics, which suggests that they should not be the main focus of policy to reduce spatial productivity differentials.