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Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation Assumptions: A Canada-U.S. Comparison

Author

Listed:
  • Jianmin Tang
  • Someshwar Rao
  • Min Li

Abstract

This article provides consistent estimates for capital stock and multifactor productivity (MFP) for Canada and the United States across major industries for the 1987-2007 period. For this purpose, capital stock estimates are developed for Canadian and U.S. industries using the same asset depreciation rates (either from the U.S. Bureau of Economic Analysis or from Statistics Canada) for the two countries. The results show that on an hours worked basis Canadian industries invest more in total capital than their U.S. counterparts. This situation reflects much greater investment in structures, with less in machinery and equipment (including information and communications technologies). The results imply that all of the Canada-U.S. labour productivity gap arises from the multifactor productivity gap.

Suggested Citation

  • Jianmin Tang & Someshwar Rao & Min Li, 2010. "Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation Assumptions: A Canada-U.S. Comparison," International Productivity Monitor, Centre for the Study of Living Standards, vol. 20, pages 22-47, Fall.
    • Handle: RePEc:sls:ipmsls:v:20:y:2010:2
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    File URL: http://www.csls.ca/ipm/20/IPM-20-Tang-Rao-Li.pdf
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    Citations

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    Cited by:

    1. Andrew Sharpe & Blair Long, 2012. "Innovation in Canadian Natural Resource Industries: A Systems-Based Analysis of Performance, Policy and Emerging Challenges," CSLS Research Reports 2012-06, Centre for the Study of Living Standards.
    2. Benjamin Dachis & William B.P. Robson, 2012. "From Living Well to Working Well: Raising Canada's Performance in Non-residential Investment," e-briefs 137, C.D. Howe Institute.
    3. Şerife Genç İleri, 2019. "Selective immigration policy and its impacts on Canada's native‐born population: A general equilibrium analysis," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(3), pages 954-992, August.
    4. Ricardo de Avillez, 2014. "A Detailed Analysis of Productivity Trends in the Canadian Forest Products Sector," CSLS Research Reports 2014-01, Centre for the Study of Living Standards.
    5. Michael-John Almon & Jianmin Tang, 2011. "Industrial Structural Change and the Post-2000 Output and Productivity Growth Slowdown: A Canada-U.S. Comparison," International Productivity Monitor, Centre for the Study of Living Standards, vol. 22, pages 44-81, Fall.
    6. Someshwar Rao, 2011. "Insights from Latin America for Canada: A Review Article on The Age of Productivity: Transforming Economies from the Bottom Up," International Productivity Monitor, Centre for the Study of Living Standards, vol. 21, pages 70-81, Spring.
    7. Serge Coulombe, 2011. "Lagging Behind: Productivity and the Good Fortune of Canadian Provinces," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 331, June.
    8. Jianmin Tang & Weimin Wang, 2015. "Economic Growth in Canada and the United States: Supply-Push or Demand-Pull?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 773-798, December.
    9. Benjaming Dachis & William B.P. Robson, 2013. "Equipping Canadian Workers: Business Investment Loses a Step against Competitors Abroad," e-briefs 167, C.D. Howe Institute.
    10. Chris Ross, 2011. "A Detailed Analysis of the Productivity Performance of the Canadian Food Manufacturing Subsector," CSLS Research Reports 2011-07, Centre for the Study of Living Standards.
    11. Ricardo de Avillez, 2011. "A Detailed Analysis of the Productivity Performance of the Canadian Primary Agriculture Sector," CSLS Research Reports 2011-06, Centre for the Study of Living Standards.

    More about this item

    Keywords

    multifactor productivity; capital stock; depreciation rate; labour productivity;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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