The sensitivity of TFP growth in UK manufacturing

Maria D Anon Higon

Research output: Contribution to journalArticlepeer-review


This paper examines the sensitivity of Total Factor Productivity (TFP) estimates to alternative concepts of output and methods of estimation. On theoretical grounds, gross output is the superior concept to real output and econometric estimates of TFP growth are to be preferred to growth-accounting estimates under general assumptions. A panel regression on UK manufacturing industries reveals that controlling for market power and capacity utilisation adjustments, growth-accounting estimates of productivity growth are generally biased. The econometric results suggest that the recovery in productivity rates experienced in the 1980s by the UK manufacturing sectors and the slowdown in the 1990s was not as large as implied by the growth-accounting estimates.

Original languageEnglish
Pages (from-to)429-447
Number of pages19
JournalGlobal Business and Economics Review
Issue number4
Publication statusPublished - 5 Nov 2007


  • Capacity utilisation
  • Competitiveness
  • Gross output
  • Productivity


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