Firm performance in Wales – An analysis of productivity using company accounts

Output and productivity growth are indicators of standards of living and prosperity. From the perspective of a devolved region, a better understanding of the determinants of productivity will lead to more informed policy formation. This paper takes a look at Wales and its recent performance using the FAME company accounts data. We model performance at the company level within Wales, specifically exploring the role of regional skills and international activity as a means of achieving better performance. Our analysis suggests that internationalisation matters – be it overseas sales or foreign ownership. Measures of regional characteristics indicate that shares of high skilled workers in a region are positively associated with productivity and appear to dominate agglomeration effects.