Regional manufacturing employment volatility in Canada: The effects of specialisation and trade**This article represents the views of the authors and does not necessarily reflect the opinions of Statistics Canada. Previous versions have been presented to the Canadian Association of Geographers meeting in Montreal and the North American Regional Science meetings in Charleston, SC. We are grateful for the helpful comments of participants from both conferences as well as three anonymous referees. We also wish to thank Robert Gibson for his excellent research assistance. This research was financially supported by Statistics Canada and the Social Sciences and Humanities Research Council

This article tests whether diversity, growth, plant size, and export intensity are empirically related to manufacturing employment volatility levels across Canadian regions during the period 1976–1997. Using cross sectional analysis, we indicate that the regions tending to be more stable are more diverse; they have lower than average growth rates, larger plant sizes and higher export intensity. First difference analysis indicates that increases in diversity and export intensity are associated with decreased volatility in larger regions, but these variables have the opposite effect for smaller regions. The analysis also shows that in areas where trade has increased, ceteris paribus, plants have grown larger and diversity has decreased. The former tends to dampen volatility and the latter tends to magnify it. When these offsetting effects are taken into account, increased trade liberalisation is found to reduce volatility for large regions, but volatility increases in smaller manufacturing centres.