UK plant and machinery capital stocks and plant closures

This paper uses individual records of the UK annual census of production (ACOP), which by definition allow historic estimates of capital expenditure in each plant to be used to calculate plant-level estimates of capital stock. Plants that close can then have their contributions to (industry) capital stock removed from the aggregate. Using this data source it is possible to show that (at the aggregate level for manufacturing) the unadjusted capital stock was around 44 percent higher than the stock adjusted for closures by 1993. Moreover, measures of the capital stock that do not adjust for plant closures result in significant bias when estimating the importance of total factor productivity growth.