Enterprise Adjustment and Labour Productivity

A staff research paper by Steven Bland and Lou Will, Resource Movements and Labour Productivity, an Australian Illustration: 1994-95 to 1997-98, presents the results of an exploratory analysis of the adjustment processes of Australian firms, and the impact of those adjustments on firm and industry labour productivity.

The analysis shows, for the firms in the sample, that average labour productivity increased through a combination of productivity improvements by incumbent firms in operation for the duration of the study period and the exit of firms.

Firms that commenced operation during the survey period also had relatively low labour productivity, suggesting that new firms require time to become established and achieve productivity gains.