Industry Productivity Growth: A Network Perspective

Abstract

Background: This study investigates the determinants of industrial productivity growth from a network perspective. Objectives: The research focuses on the influence on a focal industry’s productivity growth by its partner industries’ productivity growth, and the impact of the focal industry’s position in the supply chain network. Method/Approach: The paper models the economy as a customer-supplier industry network and empirically investigates how a focal industry’s multifactor productivity is influenced by the productivities of industries that are connected to it, and how this influence is moderated by its position in the network. Results: Based on a balanced panel dataset of 55 industries from the United States Bureau of Economic Analysis (BEA) input-output accounts, the results indicate that a focal industry’s productivity growth is positively associated with its partner industries’ productivity growth, and that industries with higher centrality in the network tend to have higher productivity growth. Conclusions: The study concludes with a discussion on the implications of the findings and the contribution to the productivity literature. Several directions for further research were identified.

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.