International Competition and Industrial Performance: Allocative Efficiency, and Turbulence
AbstractTrade experts generally favorable effects on the performance of domestic manufacturing industries in the dimensions of allocative and productive efficiency. We review theory and recent evidence on these linkages and also explore a third effect - on the turbulence of competitive conditions and the turnover of business units. Calculations using primary census records for Canada over 1973-1992 indicate, with time and industry effect, controlled, market-share turnover, entry, exit and mergers all increase with trade exposure. The effect is tied to market structures of differentiated products but broad international disturbances (North America Free Trade Area) also have significant effects. The normative significant of turbulence is mixed by has important positive components.
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Bibliographic InfoPaper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1809.
Date of creation: 1997
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