Spatial disparities in SME productivity: evidence from the service sector in England

• Main Authors: Pattanapong Tiwasing, Yoo Ri Kim, Temitope Akinremi
• Format: Article
• Language: English
• Published: Taylor & Francis Group 2020-01-01
• Series: Regional Studies, Regional Science
• Subjects: sme productivity; business services; leps; multilevel analysis; england
• Online Access: http://dx.doi.org/10.1080/21681376.2020.1854111

This paper identifies the key determinants of spatial variability of productivity, focusing on small and medium-sized enterprises (SMEs) in the service sector across England. Due to the hierarchically structured data, multilevel analysis is applied to distinguish the effects of a firm’s internal variables and (sub)regional factors on productivity. Using cross-sectional data for 10,400 SMEs from the UK government’s Small Business Survey, 2015, the results show that firm-specific determinants significantly influence productivity. The findings also indicate that location, local enterprise partnerships (LEPs) and where firms operate play a pivotal role in determining SME productivity. In particular, at the LEP level, increasing labour supply, promoting local funding and improving broadband speed potentially enhance firm productivity.