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The Trend to Smaller Producers in Manufacturing in Canada and the U.S

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  • John R Baldwin
  • Ron S Jarmin
  • Jianmin Tang

Abstract

This paper examines the trend in the importance of small producers in the Canadian and U.S. manufacturing sectors from the early 1970s to the late 1990s in order to investigate whether there was a common North American trend in changes in plant size. It finds that small plants in both countries increased their share of employment up to the 1990s, but their share remained stable in the 1990s. Small plants increased their share of output up to the 1990s, but then saw their share of output decline. Over the entire time period, their share of output increased less than their share of employment and, therefore, their relative labour productivity has fallen. The similarity in the trends in the two countries suggests that causes of this phenomenon should be sought in similarities such as the technological environment rather than in country-specific factors like unionization or trade intensities.

Suggested Citation

  • 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.
    • Handle: RePEc:cen:wpaper:02-06
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    References listed on IDEAS

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    2. Timothy Dunne, 1994. "Plant Age and Technology Use in US. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 25(3), pages 488-499, Autumn.
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      • Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1995. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521465618.
    4. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
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    6. Feller, Irwin, 1997. "Manufacturing technology centers as components of regional technology infrastructures," Regional Science and Urban Economics, Elsevier, vol. 27(2), pages 181-197, April.
    7. 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.
    8. Davis, Steven J & Haltiwanger, John & Schuh, Scott, 1996. "Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts," Small Business Economics, Springer, vol. 8(4), pages 297-315, August.
    9. J. Baldwin & JP. K. Gorecki, 1994. "Dimensions of Labor Market Change in Canada: Intersectoral Shifts, Jobs, and Worker Turnover," Journal of Income Distribution, Ad libros publications inc., vol. 3(2), pages 1-1, December.
    10. Sabourin, David & Baldwin, John R., 2001. "Impact of the Adoption of Advanced Information and Communication Technologies on Firm Performance in the Canadian Manufacturing Sector," Analytical Studies Branch Research Paper Series 2001174e, Statistics Canada, Analytical Studies Branch.
    11. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
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    13. Audretsch,David B. & Thurik,Roy (ed.), 1999. "Innovation, Industry Evolution and Employment," Cambridge Books, Cambridge University Press, number 9780521641661.
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    15. Mayes,David G. (ed.), 1996. "Sources of Productivity Growth," Cambridge Books, Cambridge University Press, number 9780521554374.
    16. Baldwin, John R. Bian, Lin Dupuy, Richard Gellatly, Guy, 2000. "Failure Rates for New Canadian Firms: New Perspectives on Entry and Exit," Failure Rates for New Canadian Firms: New Perspectives on Entry and Exit, Statistics Canada, Economic Analysis Division, number stcb5e, March.
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    Cited by:

    1. Fallahi, Firouz & Sakineh, Sojoodi & Mehin Aslaninia, Nasim, 2010. "Determinants of Labor Productivity in Iran’s Manufacturing Firms: With Emphasis on Labor Education and Training," MPRA Paper 27447, University Library of Munich, Germany.
    2. John Baldwin & W. Brown, 2004. "Regional manufacturing employment volatility in Canada: The effects of specialisation and trade," Economics of Governance, Springer, vol. 83(3), pages 519-541, July.
    3. Andrew Sharpe, 2003. "Why are Americans More Productive than Canadians?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 6, pages 19-37, Spring.
    4. Jennifer Abel-Koch, 2013. "Who Uses Intermediaries in International Trade? Evidence from Firm-level Survey Data," The World Economy, Wiley Blackwell, vol. 36(8), pages 1041-1064, August.
    5. Zhang, Feng & Park, Timothy A., 2004. "Computer Adoption Patterns Of U.S. Small Businesses," 2004 Annual meeting, August 1-4, Denver, CO 20250, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Julien Hanoteau & Jean‐Jacques Rosa, 2019. "Information technologies and entrepreneurship," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(2), pages 200-212, March.
    7. Shawn D Klimek & Ron S Jarmin & Mark E Doms, 2002. "IT Investment and Firm Performance in U.S. Retail Trade," Working Papers 02-14, Center for Economic Studies, U.S. Census Bureau.
    8. Abdoulaye Kané, 2022. "Measurement of total factor productivity: Evidence from French construction firms," EconomiX Working Papers 2022-9, University of Paris Nanterre, EconomiX.
    9. Jeffrey I. Bernstein & Richard G. Harris & Andrew Sharpe, 2002. "The Widening Canada-US Productivity Gap in Manufaturing," International Productivity Monitor, Centre for the Study of Living Standards, vol. 5, pages 3-22, Fall.
    10. Centre for the Study of Living Standards, 2003. "Productivity Trends in Natural Resources Industries in Canada," CSLS Research Reports 2003-01, Centre for the Study of Living Standards.
    11. John R. Baldwin & Richard E. Caves & Wulong Gu, 2005. "Responses to Trade Liberalization: Changes in Product Diversification in Foreign- and Domestic-Controlled Plants," Chapters, in: Lorraine Eden & Wendy Dobson (ed.), Governance, Multinationals and Growth, chapter 10, Edward Elgar Publishing.
    12. Tuan Anh Luong, 2012. "The between firm effect with multiproduct firms," Globalization Institute Working Papers 122, Federal Reserve Bank of Dallas.
    13. Clymo, AJ, 2017. "Heterogeneous Firms, Wages, and the Effects of Financial Crises," Economics Discussion Papers 20572, University of Essex, Department of Economics.
    14. Mark Doms & Ron Jarmin & Shawn Klimek, 2004. "Information technology investment and firm performance in US retail trade," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(7), pages 595-613.
    15. Chandan Sharma, 2018. "Productivity and Size of Firms: Evidence from Indian Manufacturing," Economics Bulletin, AccessEcon, vol. 38(2), pages 791-798.
    16. Baldwin, John R. Gu, Wulong, 2008. "Outsourcing and Offshoring in Canada," Economic Analysis (EA) Research Paper Series 2008055e, Statistics Canada, Analytical Studies Branch.
    17. Jean-Jacques Rosa & Julien Hanoteau, 2012. "The Shrinking Hand: Why Information Technology Leads to Smaller Firms," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 19(2), pages 285-314, July.
    18. Baldwin, John R. Caves, Richard Gu, Wulong, 2005. "Réactions à la libéralisation des échanges : changements observés au niveau de la diversification des produits dans les usines sous contrôle étranger et canadien," Série de documents de recherche sur l'analyse économique (AE) 2005031f, Statistics Canada, Direction des études analytiques.
    19. Andrew Sharpe, 2003. "Why are Americans More Productive than Canadians?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 6, pages 19-37, Spring.

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