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Knowledge-Based Labor Productivity Improvements: Canada Case Study, 1961-2004


  • KHAZABI, Massoud


This paper examines the importance of Research and Development activities as a source of growth in labor productivity in the Canadian economy within last four decades. Time series data are used to develop an econometrics model that captures the interaction between labor productivity and R&D, stock of public infrastructure and trade openness. Extensive tests of quality of data, choice of model and structural breaks are performed to enrich the value of the research. Our results suggest that the type of capital involved has a significant effect on the extent of labor productivity and growth improvement. Innovation as the major characterizer of the knowledge based economy improves the labor productivity both in short and long run. The trade openness effect has been discussed in depth consequently.

Suggested Citation

  • KHAZABI, Massoud & FALLAHI, F., 2008. "Knowledge-Based Labor Productivity Improvements: Canada Case Study, 1961-2004," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(1), pages 98-106.
  • Handle: RePEc:eaa:aeinde:v:8:y:2008:i:1_8

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    References listed on IDEAS

    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. J. Bradford De Long & Lawrence H. Summers, 1991. "Equipment Investment and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 445-502.
    3. Canzoneri, Matthew B. & Cumby, Robert E. & Diba, Behzad, 1999. "Relative labor productivity and the real exchange rate in the long run: evidence for a panel of OECD countries," Journal of International Economics, Elsevier, vol. 47(2), pages 245-266, April.
    4. Magnus Blomström & Robert E. Lipsey & Mario Zejan, 1996. "Is Fixed Investment the Key to Economic Growth?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 269-276.
    5. Harchaoui, Tarek & Tarkhani, Faouzi, 2005. "Four Decades of Productivity Performance in Canada," The Canadian Productivity Review 2005001e, Statistics Canada, Economic Analysis Division.
    6. Peter Hart, 1995. "The Convergence of Labour Productivity in British and German Industries," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 2(3), pages 453-463.
    7. Batstone, Eric, 1986. "Labour and Productivity," Oxford Review of Economic Policy, Oxford University Press, vol. 2(3), pages 32-43, Autumn.
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    More about this item


    Labour Productivity; Human Capital; Canada;

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada


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