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How Are Canadian Regions Adjusting to a Larger and More Integrated North American Market?

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  • Gu, Wulong
  • Sawchuk, Gary

Abstract

This paper relates to two understudied, but increasingly important concerns: the measurement of regional integration, and the regional benefits to North American economic integration. The objective is to measure Canada's regional integration in manufacturing industries with that of the United States, and examine the regional impact of growing trade integration on productivity growth and select other economic performance variables. Our research shows that Canada and each of its regions are becoming more integrated in trade in manufactures with the United States, but Ontario is much more integrated than the rest of Canada. While all regions have benefited through improved productivity performance, higher wages and higher output growth, Ontario has been the principal beneficiary. No evidence was found that increased trade integration in manufactures with the United States caused anything more than short-run adjustment losses in employment. Canada and each of its regions have expanded their share of North American manufacturing which stands in sharp contrast to the supposition that it would be the United States that would experience a growth in North American production share (Krugman, 1980).

Suggested Citation

  • Gu, Wulong & Sawchuk, Gary, 2006. "How Are Canadian Regions Adjusting to a Larger and More Integrated North American Market?," Economic Analysis (EA) Research Paper Series 2006039e, Statistics Canada, Analytical Studies Branch.
  • Handle: RePEc:stc:stcp5e:2006039e
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    References listed on IDEAS

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    Cited by:

    1. Baldwin, John R. & Brown, W. Mark & Gu, Wulong, 2008. "Geographic Market Access and the Effects of Trade on Length of Production Run, Product Diversity and Plant Scale of Canadian Manufacturing Plants, 1974 to 1999," Economic Analysis (EA) Research Paper Series 2008052e, Statistics Canada, Analytical Studies Branch.

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    Keywords

    Business performance and ownership; International trade; Manufacturing; Regional and urban profiles; Trade patterns;

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