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WMS research seminar: 'Firm-level productivity in New Zealand, 2001-2016'

Date Monday 2 December 2019
Time 1pm - 2pm
Where MSB.4.02, Waikato Management School, Hillcrest Road, Hamilton
Presenter Professor of Economics Richard Harris (Durham University, UK)
Admission Cost Free

Waikato Management School invites you to attend a research seminar by Professor of Economics Richard Harris (Durham University, UK) on Monday, 2 December, starting at 1pm.

This seminar is open to all staff, students and members of the public. Just come along on the day.

Professor Harris is the deputy executive dean (research) in the Faculty of Business at Durham University, and since 2016 has been a research affiliate at the New Zealand Productivity Commission.

Before returning to Durham in 2012, he was director of the Centre for Public Policy in the Regions, Universities of Glasgow and Strathclyde. Earlier in his career (1989-1993), he was associate professor of economics at the University of Waikato's Management School.

During his four-decades as an academic, he has published 116 publications in internationally refereed journals; six books, and 39 book chapters or other articles.

In this research seminar, Professor Harris will discuss some early results looking at firm-level total factor productivity (TFP) in New Zealand, over a 17-year period from 2001 to 2016.

Production functions (that also take into account competition effects) have been estimated for some 37 industry sub-groups, which include covariates representing city/region-effects, and most importantly include a measure of spatial agglomeration based on the distance between plants within the industry in which it operates.

A second set of results, relating to levels of TFP, identify firms that occupy the ‘frontier’ (in terms of productivity distributions), and looks at issues such as (i) which firms comprise this sub-group; (ii) is there stability in terms of who comprise the frontier; (iii) do firms below the frontier ‘catch-up’ over time (and is ‘catch-up’ dependent on distance from the frontier) – i.e., is there diffusion over time whereby ‘best practice’ technology spreads to less efficient firms, as a result of learning from those at the frontier of the (global) productivity distribution?

Lastly, by dividing firms into different sub-groups (e.g., foreign-owned; those that are involved in R&D/export; etc.), a Haltiwanger-type decomposition is applied to discover which attributes contribute most to overall higher 2001-2016 TFP growth. This approach directly considers the importance of reallocation where ‘churn’ (opening and closures – what Schumpeter called ‘creative destruction’) and whether reallocation of market shares from continuing low to higher productivity firms, can increase aggregate productivity in terms of a ‘batting average’ effect.

This study helps to provide information for policy makers as to whether allocations of scare resources (factor inputs) are optimal to underpin the growth of higher-performing firms.