Living on the edge: an anatomy of New Zealand's frontier firms
2 March 2021
Download [112 KB PDF]This Motu paper was commissioned by the Productivity Commission to understand the key characteristics of firms at New Zealand’s productivity frontier through the use of Stats NZ’s Longitudinal Business Database.
Theory and international evidence suggest that firms at the New Zealand productivity frontier may be especially important for the diffusion of knowledge from the global productivity frontier, acting as a conduit for new technologies and ideas to flow into the domestic economy.
This paper finds that frontier firms:
- are disproportionately important in the economy. While constituting only 8% of firms, frontier firms account for 13% of total labour input, 27% of aggregate gross output, 29% of value added (gross output minus intermediate consumption) and 22% of aggregate capital services;
- have much higher levels of labour productivity than non-frontier firms. On average, frontier firms’ value added per worker is almost double that of the second most productive group of firms (those in the second decile) and is nine times as productive as those firms in the bottom 10% of the productivity distribution, ranked by MFP ;
- have had low labour productivity growth over the period, yet the combination of their high productivity levels and input share has meant that they have made a significant contribution to aggregate productivity growth since 2005. If, for example, frontier firms had experienced no increase in labour productivity or in labour inputs over the period, the annual growth rate in labour productivity would have fallen from 0.83% to 0.59%; and
- are marginally younger, employ more skilled workers and pay a higher firm wage premium than non-frontier firms. They are also more likely to be in most major urban areas such as Auckland.
This Motu paper is one of a number of research inputs into the Commission's inquiry into maximising the economic contribution of New Zealand's frontier firms.
Downloads
Summary
Living on the edge: an anatomy of New Zealand's most productive firms
Publications
Filter publications by topic.
1 May 2023
28 February 2023
28 February 2023
27 February 2023
27 February 2023
23 December 2022
21 December 2022
30 September 2022
29 September 2022
18 July 2022
9 June 2022
31 May 2022
28 May 2022
28 May 2022
1 April 2022
1 December 2021
14 November 2021
8 November 2021
8 November 2021
8 November 2021
8 November 2021
27 September 2021
1 September 2021
27 May 2021
21 April 2021
21 April 2021
20 April 2021
20 April 2021
1 April 2021
25 February 2021
4 December 2020
30 November 2020
4 September 2020
31 August 2020
30 June 2020
28 April 2020
18 March 2020
9 March 2020
19 February 2020
30 November 2019
16 October 2019
16 August 2019
7 June 2019
16 May 2019
14 February 2019
1 February 2019
1 February 2019
24 December 2018
14 November 2018
1 August 2018
20 March 2018
22 February 2018
23 November 2017
23 November 2017
1 November 2017
29 September 2017
1 June 2017
20 February 2017
16 December 2016
28 November 2016
27 April 2016
12 January 2016
1 December 2015
29 June 2015
29 May 2015
29 May 2015
5 February 2015
21 January 2015
5 June 2014
5 June 2014
1 March 2014
19 December 2013
20 September 2013
16 July 2013
