International Comparisons of Industry-based Productivity Levels in the Financial and Business Service Sectors

This article attempts to explain the relatively poor productivity growth in four major EU countries (Germany, France, United Kingdom, and Netherlands) relative to the United States. Our study is carried out from a sectoral perspective, focussing on the financial and business services sectors. Instead of examining only sectoral productivity growth rates, we also examine sectoral productivity level gaps. Our results imply that the productivity differential in the business services sector is a major factor behind the US lead in productivity.