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Plant Turnover and Productivity Growth in Canadian Manufacturing

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  • John R. Baldwin

    (Statistics Canada)

  • Wulong Gu

    (Statistics Canada)

Abstract

Entry is important because new firms and new plants provide an important source of competition to incumbents. They are a source of new products and technologies. In this paper, we outline the size of the turnover in plants that have entered and exited the Canadian manufacturing sector over each of the last three decades – 1973-79, 1979-88 and 1988-97. We also examine the contribution of plant turnover to labour productivity growth in the manufacturing sector over the three periods. Plant turnover makes a significant contribution to productivity growth as more productive entrants replace exiting plants that are less productive. We also find that a disproportionately large fraction of the contribution of plant turnover to productivity growth is due to multi-plant or foreign-controlled firms closing down and opening up new plants. The plants opened up by multi-plant or foreign-controlled firms are typically much more productive than those opened by single-plant or domestic-controlled ... Entrées et sorties d'usines et croissance de la productivité dans le secteur manufacturier au canada Les entrées sur le marché sont importantes parce que les nouvelles entreprises et les nouvelles usines, qui génèrent de nouveaux produits et de nouvelles technologies, font une vive concurrence aux enterprises existantes. Dans le présent document, nous examinons l’importance du roulement des usines dans le secteur manufacturier canadien, c’est-à-dire le nombre d’entrées et de sorties, au cours des trois dernières décennies, soit de 1973 à 1979, de 1979 à 1988 et de 1988 à 1997. Nous examinons aussi la contribution de ce roulement à la croissance de la productivité du travail dans le secteur manufacturier au cours de ces trios périodes. Le roulement des usines contribue de façon importante à la croissance de la productivité, les usines entrantes plus productives remplaçant les usines sortantes moins productives. Par ailleurs, nous constatons qu’une part disproportionnellement élevée de l’effet des entrées et des sorties sur la croissance de la productivité est attribuable à la ...

Suggested Citation

  • John R. Baldwin & Wulong Gu, 2002. "Plant Turnover and Productivity Growth in Canadian Manufacturing," OECD Science, Technology and Industry Working Papers 2002/2, OECD Publishing.
  • Handle: RePEc:oec:stiaaa:2002/2-en
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    File URL: http://dx.doi.org/10.1787/745662258480
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