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British J of Management - 2022 - Douch - Productivity Debacle in the UK Do Post‐crisis Firm Cohorts Explain the.pdf (976.15 kB)

Productivity debacle in the UK: Do post-crisis firm cohorts explain the performance puzzle?

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posted on 2023-07-21, 16:03 authored by Mustapha Douch, Huw EdwardsHuw Edwards, Sushanta Kumar Mallick

This paper investigates how the aftermath of the 2008 crisis affected firm productivity in the UK, focusing particularly on the cohort effect of firms established after 2008 - a previously overlooked aspect of the crisis - as well as the interaction with access to credit, which we test using firm-specific and time-varying credit scores. For identification, a matched sample is used based on credit score, firm age, size and ownership status, combining propensity score matching with difference-in-differences. While we find evidence that smaller firm size and changes in credit conditions affect productivity, about half of the difference in productivity remains unexplained. When we extend the matching analysis to examine across sectors and cohorts, we find that the low productivity performance 2011-16 is driven primarily by newer firms in the services sector, rather than in manufacturing. Within services, the underlying productivity puzzle is driven by a cessation of output growth in high-productivity financial services, while abundant labour supply has led to a `levelling down' of performance of newer firms in the rest of services, in line with relatively low-productivity manufacturing. 

History

School

  • Loughborough Business School

Department

  • Economics

Published in

British Journal of Management

Volume

34

Issue

3

Pages

1459-1487

Publisher

Wiley

Version

  • VoR (Version of Record)

Rights holder

© The Author(s)

Publisher statement

This is an Open Access Article. It is published by Wiley under the Creative Commons Attribution 4.0 International Licence (CC BY). Full details of this licence are available at: https://creativecommons.org/licenses/by/4.0/

Acceptance date

2022-06-14

Publication date

2022-08-01

Copyright date

2022

ISSN

1045-3172

eISSN

1467-8551

Language

  • en

Depositor

Dr Huw Edwards. Deposit date: 15 June 2022

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