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Capital Intensity in Canada and the United States, 1987 to 2003

Author

Listed:
  • Baldwin, John R.
  • Fisher, Anthony
  • Gu, Wulong
  • Lee, Frank C
  • Robidoux, Benoit

Abstract

Official data from statistical agencies are not always ideal for cross-country comparisons because of differences in data sources and methodology. Analysts who engage in cross-country comparisons need to carefully choose among alternatives and sometimes adapt data especially for their purposes. This paper develops comparable capital stock estimates to examine the relative capital intensity of Canada and the United States. To do so, the paper applies common depreciation rates to Canadian and U.S. assets to come up with comparable capital stock estimates by assets and by industry between the two countries. Based on common depreciation rates, it finds that capital intensity is higher in the Canadian business sector than in the U.S. business sector. This is the net result of quite different ratios at the individual asset level. Canada has as higher intensity of engineering infrastructure assets per dollar of gross domestic product produced. Canada has a lower intensity of information and communications technology (ICT) machinery and equipment (M&E). Non-ICT M&E and building assets intensities are more alike in the two countries. However, these results do not control for the fact that different asset-specific capital intensities between Canada and the United States may be the result of a different industrial structure. When both assets and industry structure are taken into account, the overall picture changes somewhat. Canada's business sector continues to have a higher intensity of engineering infrastructure and about the same intensity of building assets; however, it has a deficit in M&E that goes beyond ICT assets.

Suggested Citation

  • Baldwin, John R. & Fisher, Anthony & Gu, Wulong & Lee, Frank C & Robidoux, Benoit, 2008. "Capital Intensity in Canada and the United States, 1987 to 2003," The Canadian Productivity Review 2008018e, Statistics Canada, Economic Analysis Division.
  • Handle: RePEc:stc:stcp6e:2008018e
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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=15-206-X2008018&ObjType=46&lang=en&limit=0
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    Citations

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    Cited by:

    1. Wulong Gu & Amélie Lafrance, 2010. "Productivity Growth in Canadian and U.S. Regulated Industries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 19, pages 50-65, Spring.
    2. repec:clh:resear:v:10:y:2017:i:6 is not listed on IDEAS
    3. Wulong Gu, 2012. "Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 49-62, Fall.
    4. Ana Rincon-Aznar & Rebecca Riley & Garry Young, 2017. "Academic Review of Asset Lives in the UK," National Institute of Economic and Social Research (NIESR) Discussion Papers 474, National Institute of Economic and Social Research.

    More about this item

    Keywords

    Economic accounts; Productivity accounts;

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