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Impact of the Adoption of Advanced Information and Communication Technologies on Firm Performance in the Canadian Manufacturing Sector

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Author Info
Baldwin, John R.
Sabourin, David

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Abstract

This paper investigates the evolution of the industrial structure in the Canadian manufacturing sector and its relationship to technological change by examining the take-up of advanced technologies and how it is related to the stochastic growth process in the plant population. Its framework is grounded in the view that growth is a stochastic process that involves learning. Experimentation with new technologies rewards some firms with superior growth and profitability. Examining how growth is associated with the choice of different technology strategies indicates which of these is being rewarded.The evolution of this process is studied by examining the relationship between the uptake of advanced technologies and the performance of plants in the manufacturing sector. This is done by using cross-sectional data on advanced technology use and by combining it with longitudinal panel data on plant performance. In particular, the paper examines the relationship between the use of information and communications technology (ICT) and the growth in a plant's market share and its relative productivity. The study finds that a considerable amount of market share is transferred from declining firms to growing firms over a decade. At the same time, the growers increase their productivity relative to the losers. Those technology users that were using communications technologies or that combined technologies from different classes increased their relative productivity the most. In turn, gains in relative productivity were accompanied by gains in market share. Other factors that were associated with gains in market share were the presence of R&D facilities and other innovative activities.

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Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 2001174e.

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Date of creation: 03 Oct 2001
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Handle: RePEc:stc:stcp3e:2001174e

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Related research
Keywords: Business performance and ownership; Science and technology; Information and communications technology; Innovation; Information and communications technology sector;

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This item is featured on the following reading lists:
  1. Industrial Sociology (FCT-UNL)
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Laura Power, 1998. "The Missing Link: Technology, Investment, And Productivity," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 300-313, May. [Downloadable!] (restricted)
  2. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January. [Downloadable!] (restricted)
    Other versions:
  3. Geroski, Paul A, 1989. "Entry, Innovation and Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 572-78, November. [Downloadable!] (restricted)
  4. Baldwin, John R., 2000. "Innovation and Training in New Firms," Analytical Studies Branch Research Paper Series 2000123e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  5. Baldwin, John R. & Johnson, Joanne, 1995. "Business Strategies in Innovative and Non-innovative Firms in Canada," Analytical Studies Branch Research Paper Series 1995073e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  6. Dunne, Timothy & Schmitz, James A, Jr, 1995. "Wages, Employment Structure and Employer Size-Wage Premia: Their Relationship to Advanced-Technology Usage at US Manufacturing Establishments," Economica, London School of Economics and Political Science, vol. 62(245), pages 89-107, February. [Downloadable!] (restricted)
  7. Baldwin, John R., 1995. "Innovation: The Key to Success in Small Firms," Analytical Studies Branch Research Paper Series 1995076e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  8. Baldwin, John R. & Sabourin, David & West, Donald, 1999. "Advanced Technology in the Canadian Food Industry," Advanced Technology in the Canadian Food Industry, Statistics Canada, Economic Analysis Division, number stcb4e, July. [Downloadable!]
  9. Baldwin, John R. & Harchaoui, Tarek, 2002. "Productivity Growth in Canada," Productivity Growth in Canada, Statistics Canada, Economic Analysis Division, number stcb6e. [Downloadable!]
  10. J. Bradford Jensen & Robert H McGuckin & Kevin J Stiroh, 2000. "The Impact of Vintage and Survival on Productivity: Evidence from Cohorts of U.S. Manufacturing Plants," Working Papers 00-06, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
  11. Baldwin, John R., 1996. "Productivity Growth, Plant Turnover and Restructuring in the Canadian Manufacturing Sector," Analytical Studies Branch Research Paper Series 1995087e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  12. Stoneman, Paul & Kwon, Myung Joong, 1996. "Technology Adoption and Firm Profitability," Economic Journal, Royal Economic Society, vol. 106(437), pages 952-62, July. [Downloadable!] (restricted)
  13. Baldwin, John R. & Yates, Janice, 1999. "Innovation, Training and Success," Analytical Studies Branch Research Paper Series 1999137e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  14. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
  15. Raa, T. ten & Wolff, E.N., 2000. "Engines of growth in the U.S. economy," Discussion Paper 77, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  16. Baldwin, John R. & Diverty, Brent, 1995. "Advanced Technology Use in Canadian Manufacturing Establishments," Analytical Studies Branch Research Paper Series 1995085e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  17. Baldwin, John R. & Lin, Zhengxi, 2001. "Impediments to Advanced Technology Adoption for Canadian Manufacturers," Analytical Studies Branch Research Paper Series 2001173e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
    Other versions:
  18. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December. [Downloadable!] (restricted)
  19. repec:cup:cbooks:9780521465618 is not listed on IDEAS
  20. Baldwin, John R. & Sabourin, David, 1999. "Innovative Activity in Canadian Food Processing Establishments: the Importance of Engineering Practices," Analytical Studies Branch Research Paper Series 1999101e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  21. Baldwin, John R. & Brown, W. Mark & Vinodrai, Tara, 2001. "Dynamics of the Canadian Manufacturing Sector in Metropolitan and Rural Regions," Analytical Studies Branch Research Paper Series 2001169e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sabourin, David & Baldwin, John R. & Smith, David, 2003. "Impact of Advanced Technology Use on Firm Performance in the Canadian Food Processing Sector," Economic Analysis (EA) Research Paper Series 2003012e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  2. Beckstead, Desmond & Gellatly, Guy, 2004. "Are Knowledge Workers Found Only in High-technology Industries?," The Canadian Economy in Transition 2004005e, Statistics Canada, Economic Analysis Division. [Downloadable!]
  3. John R Baldwin & Ron S Jarmin & Jianmin Tang, 2002. "The Trend to Smaller Producers in Manufacturing in Canada and the U.S," Working Papers 02-06, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  4. Baldwin, John R. & Jarmin , Ron S. & Tang, Jianmin, 2002. "The Trend to Smaller Producers in Manufacturing: A Canada/U.S. Comparison," Economic Analysis (EA) Research Paper Series 2002003e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  5. Baldwin, John R. & Gellatly, Guy, 2006. "Innovation Capabilities: The Knowledge Capital Behind the Survival and Growth of Firms," The Canadian Economy in Transition 2006013e, Statistics Canada, Economic Analysis Division. [Downloadable!]
  6. Harchaoui, Tarek & Tarkhani, Faouzi, 2004. "Whatever Happened to Canada-United States Economic Growth and Productivity Performance in the Information Age?," Economic Analysis (EA) Research Paper Series 2004025e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  7. Baldwin, John R. & Sabourin, David, 2002. "Enhancing Food Safety and Productivity: Technology Use in the Canadian Food Processing Industry," Analytical Studies Branch Research Paper Series 2002168e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  8. Baldwin, John R. & Beckstead, Desmond & Brown, W. Mark, 2003. "Hollowing-out, Trimming-down or Scaling-up? An Analysis of Head Offices in Canada, 1999 to 2002," Economic Analysis (EA) Research Paper Series 2003019e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  9. Sang Nguyen & B.K. Atrostic, 2005. "Computer Investment, Computer Networks and Productivity," Working Papers 05-01, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  10. Baldwin, John R. & Gu, Wulong, 2005. "Global Links: Multinationals, Foreign Ownership and Productivity Growth in Canadian Manufacturing," The Canadian Economy in Transition 2005009e, Statistics Canada, Economic Analysis Division. [Downloadable!]
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