International Competition and Industrial Performance: Allocative Efficiency, Productive Efficiency, and Turbulence
AbstractTrade exerts generally favourable effects on the performance of domestic manufacturing industries in the dimensions of allocative and productive efficiency. This paper reviews 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 American Free Trade Area) also have significant effects. The normative significant of turbulence is mixed but has important positive components.
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Bibliographic InfoPaper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 1997108e.
Date of creation: 15 Oct 1997
Date of revision:
Business performance and ownership; International trade; Business adaptation and adjustment; Entry; exit; mergers and growth; Trade patterns; Current conditions;
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