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Production Technology Differences Between Canadian-Owned and Foreign-Owned Firms Using Translog-Production Functions

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  • Vittorio Corbo
  • Oli Havrylyshyn

Abstract

The discussion of foreign ownership in Canada frequently refers to a conventional view that foreign-owned firms are larger, more capital-intensive, pay higher wages and are more efficient. Evidence for these characterizations has unfortunately come from comparisons of partial productivity measures of labor or measures of average capital-intensity, with all the uncertainty that this entails. It is the object of this paper to compare the technology characteristics of Canadian and US-owned establishments in Canada by means of a translog production function estimate, utilizing micro level data. While we find strong evidence for the view that the two groups operate with different technologies, and that US-owned establishments are larger, we do not find support for the conventional view that US-owned establishments are more capital-intensive, have higher labor productivity, or lower costs of production.

Suggested Citation

  • Vittorio Corbo & Oli Havrylyshyn, 1982. "Production Technology Differences Between Canadian-Owned and Foreign-Owned Firms Using Translog-Production Functions," NBER Working Papers 0981, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0981
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    Cited by:

    1. Lois E. Stekler & Guy V. G. Stevens, 1991. "The adequacy of U.S. direct investment data," International Finance Discussion Papers 401, Board of Governors of the Federal Reserve System (U.S.).
    2. Lois E. Stekler & Guy V. G. Stevens, 1991. "The Adequacy of U.S. Direct Investment Data," NBER Chapters, in: International Economic Transactions: Issues in Measurement and Empirical Research, pages 321-353, National Bureau of Economic Research, Inc.

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