Human Resource Management Diffusion and Productivity Imbalances

In this study, we explore spatial variance in management practices and assess its potential contribution to regional imbalances in productivity. The research builds on a growing body of evidence which indicates that differences in management practices can account for a substantial share of cross-country differences in total factor productivity, and which identifies an important role for management practices in explaining differences in productivity between firms in the UK. We contribute to this literature by studying regional variation in HRM and related management practices using workplace-level (i.e. plant-level) data in Britain, taken from the Workplace Employment Relations Survey (WERS). We use these data to map spatial variance in HRM intensity in Britain. We then seek to account for that variance and, in doing so, establish whether regional variance in HRM can help to account for regional variance in productivity. This analysis is complemented by a comparative investigation of equivalent data for France, where levels of productivity and HRM are both higher and less dispersed.