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Bigger establishments in thicker markets: can we explain early productivity differentials between Canada and the United States?

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  • Kris Inwood
  • Ian Keay

Abstract

We use establishment-level data describing manufacturers located in 128 border and near-border counties in Michigan, New York, Ohio, Pennsylvania, and Ontario to calculate Canadian relative to U.S. total factor productivity ratios for 25 industries. The data have been compiled from the manuscripts for the 1870 U.S. and 1871 Canadian census of manufacturing. Our results illustrate that the average U.S. establishment was approximately 7% more efficient than its Canadian counterpart in 1870-71. When we control for establishment size and market density the U.S. productivity advantage shrinks to slightly less than 3%.

Suggested Citation

  • Kris Inwood & Ian Keay, 2005. "Bigger establishments in thicker markets: can we explain early productivity differentials between Canada and the United States?," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1327-1363, November.
  • Handle: RePEc:cje:issued:v:38:y:2005:i:4:p:1327-1363
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    Cited by:

    1. Cranfield, John & Inwood, Kris, 2007. "The great transformation: A long-run perspective on physical well-being in Canada," Economics & Human Biology, Elsevier, vol. 5(2), pages 204-228, July.

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