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Technological frontier, technical efficiency and the post-2000 productivity slowdown in Canada

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  • Tang, Jianmin
  • Wang, Weimin

Abstract

We study the post -2000 productivity slowdown in Canada. Due to data limitation, the causes of the slowdown have not been studied systematically. Unlike most previous studies that focus directly on the actual productivity, in this paper we decompose the actual productivity into two components: technological frontier and technical efficiency. Technological frontier measures the maximum level of productivity potential related to firm-specific technology development while technical efficiency reflects the ability/technique in achieving the potential. Using a constructed rich micro data, we find that Canada's productivity slowdown cannot be largely explained by factors such as R&D, ICTs and intangibles that are considered to be important to productivity. Instead, we show that the productivity slowdown in Canada was mainly due to the retreat of aggregate technological frontier, driven by large and high-productivity firms.

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  • Tang, Jianmin & Wang, Weimin, 2020. "Technological frontier, technical efficiency and the post-2000 productivity slowdown in Canada," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 12-25.
    • Handle: RePEc:eee:streco:v:55:y:2020:i:c:p:12-25
    DOI: 10.1016/j.strueco.2020.06.003
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    More about this item

    Keywords

    Productivity; Technological frontier; Technical efficiency;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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