Spatial determinants of productivity: Analysis for the regions of Great Britain |
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| Authors: | Patricia Rice Anthony J. Venables Eleonora Patacchini |
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| Affiliation: | aDepartment of Economics, University of Southampton, Southampton, SO17 1BJ, UK;bDepartment of Economics, London School of Economics, Houghton Street, London WC2A 2AE, UK;cCEPR, UK;dLa Sapienza, Rome, Italy |
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| Abstract: | This paper uses NUTS3 sub-regional data for Great Britain to analyse the determinants of spatial variations in income and productivity. We decompose the spatial variation of earnings into a productivity effect and an occupational composition effect. For the former (but not the latter) we find a robust relationship with proximity to economic mass, suggesting that doubling the population of working age proximate to an area is associated with a 3.5% increase in productivity in the area. We measure proximity by travel time, and show that effects decline steeply with time, ceasing to be important beyond approximately 80 min. |
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| Keywords: | Regional disparities Productivity Clustering |
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