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The Canada-U.S. Productivity Puzzle: Regional Evidence of the Pulp and Paper Industry, 1971-2005

Author

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  • Jean-Thomas Bernard

    () (Department of Economics, University of Ottawa)

  • Jakir Hussain

    () (PhD Candidate, Department of Economics, University of Ottawa)

Abstract

We analyze the total factor productivity (TFP) of the pulp and paper industry in three Canadian provinces (British Columbia, Ontario, and Quebec) and in three U.S. states that are contiguously located south of the border (Washington, Illinois, and Maine) over the period of 1971 to 2005. We find that the industry in the three Canadian provinces had much higher TFP growth rates in the era following the Free Trade Agreement (FTA), signed in 1988. In terms of productivity trend, this relative TFP surge has allowed the industry in the three Canadian provinces to move ahead of Illinois and Washington and closer to Maine which is the U.S. leader in the sample. Our results in this particular case do not support the commonly accepted view that Canada has a productivity problem relative to the U.S.

Suggested Citation

  • Jean-Thomas Bernard & Jakir Hussain, 2015. "The Canada-U.S. Productivity Puzzle: Regional Evidence of the Pulp and Paper Industry, 1971-2005," Working Papers 1509E, University of Ottawa, Department of Economics.
  • Handle: RePEc:ott:wpaper:1509e
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    Keywords

    Total factor productivity; income convergence; pulp and paper industry;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L73 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Forest Products
    • N62 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: 1913-

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