Relative productivity levels: UK and German manufacturing industry, 1979 and 1989

Compares the productivity record of 30 manufacturing industries in UK and Germany in 1979 and 1989. Discusses the relative stocks of three forms of capital: physical capital, human capital and R&D expenditure. Standard growth accounting framework is used to estimate relative multi‐factor productivity levels. Concludes that, although Germany had a strong labour productivity advantage in 1989, Britain′s relative position had improved considerably since 1979. By 1989 German superiority could largely be explained by greater capital resources.