The Distribution of Productivity in Irish Manufacturing Between 1995 and 2004 - Determinants, Changes and Implications

Using plant level data from the Irish Census of Industrial Production, this paper documents the extent of the productivity spread in Irish manufacturing industries and its determinants. It looks at changes in the distribution of productivity over the period 1995-2004 and at movements of plants within the distribution. It also examines the relationship between spreads and productivity growth. The annual average productivity growth of 3.9 per cent over the period has rendered plants across the distribution more productive. However, there was less than proportional entry of new plants at the top of the productivity distribution until 2000. Persistence of plants within the productivity distribution is high, although mean convergence is faster for plants with below average productivity. Productivity growth is slower in industries with larger spreads in the lower half of the distribution.