Factors affecting the productivity of manufacturing sector in Sri Lanka: a spatial analysis

Two indexes of productivity — labour productivity and capital productivity — have been employed to measure and map productivity patterns of manufacturing industries in Sri Lanka. There exist extensive regional differences in the levels of productivity. Regression results show that the spatial variation of labour productivity is positively related to capital intensity and the level of urbanization and is negatively related to the nature of enterprises. Capital intensity and level of urbanisation have a negative influence on the capital productivity. The selected five variables in the regression analyses explain 65% of the spatial variation of labour productivity and 39% of capital productivity.