"Spatial productivity differences : from the micro to the macro"

Abstract :
We assemble two comparable datasets for France and the UK covering the population of firms with one employee or more spanning over the period 2004-2017. This delivers us with enough information to estimate TFP and markups for an unprecedentedly large number of firms allowing for comprehensive longitudinal analyses and granular regional-level investigations for both countries. Despite some differences between France and the UK in terms of the extent of TFP and labour productivity recovery post-financial crisis, we find that markups have, for both countries, not yet recovered their pre-financial crisis level suggesting that : i) firms seem to really struggle to achieve pre-financial crisis profit margins ; ii) there is little support for a market power rise in France and/or the UK. We further provide new facts about the aggregation of firm-level productivity into regional-level productivity highlighting similarities and differences between the two countries.