SCOTTISH JOURNAL OF POLITICAL ECONOMY FEBRUARY 1961
| DOI | http://doi.org/10.1111/j.1467-9485.1961.tb00145.x |
| Date | 01 February 1961 |
| Published date | 01 February 1961 |
| Author | A. I. Macbean,P. E. Hart |
SCOTTISH
JOURNAL
OF
POLITICAL
ECONOMY
FEBRUARY
2
961
REGIONAL DIFFERENCES IN PRODUCTIVITY,
PROFITABILITY
AND
GROWTH
:
A
PILOT STUDY1
1.
INTRODUCTION
IN
spite
of
the vast amount of theoretical and applied economic re
search
on
international differences in productivity, profitability and
economc growth, comparatively little attention has been given to such
differences between regions in one country. This neglect
is
difficult
to
understand because the simplest way of increasing national income
in
a
country
as a whole, at least in the short run,
is
to
increase economic
expansion
in
those of its regions where growth has been slowest
and
where, presumably, there is a greater chance of finding unused capacity
and unemployed labour. The reasons for not pursuing this line
of
thought are partly due to the widely held belief that the economic
cost
of such expansion would be excessively high. In the United Kingdom
it
is admitted that further expansion in the Midlands and in the South
might encounter external diseconomies and it is recognised that the
absorption
of
unemployed workers in the relatively depressed regions
elsewhere would reduce national assistance payments and unemploy-
ment benefits, but it is still maintained that the costs of directing
ex-
pansion away from the Midlands and the South are too high. This
belief
is
surprisingly strong in view
of
the general absence
of
informa-
tion on regional cost differences. In this paper we present evidence on
the differences between productivity, profitability and growth in one
region, Scotland, and the whole United Kingdom. In principle, the
'We
wish to acknowledge our debt to the Board of Trade and
to
the
National Institute of Economic
&
Social Research for providing data from
their files of company accounts and to Dr.
C.
E.
V.
Leser
for
comments on
an earlier draft. However, they are in no way responsible for
the
views
ex-
pressed here.
1
1
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