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Research

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Funded Projects

The following are some of projects the Partnership has funded to assist researchers with data access and travel to CDER.

If you would like to apply for funding, please review the application in Funding.

Is there a conflict between economic growth and environmental sustainability? This project will assemble data that can be used to contribute to an evidence-based analysis of this question. As part of the project, Najjar has produced a data dictionary and user guide for the GHG-NPRI-ASM (Greenhouse Gas-National Pollutant Registry Inventory-Annual Survey of Manufacturing) database, which will be the basis of economic analysis that relates economic growth and the environment.

Related Data Sets
ASM, CBSA Customs

Related Research Themes
Incomes, Industry and Firm Analysis

In economic models of trade, it is stated that firms that are more productive will export, while those that are less productive will sell products domestically, or completely exit the market. However, differences in productivity alone cannot explain why some firms export, and some do not. One aspect that may limit a firms international trading opportunities is a lack of information regarding such opportunities, or a lack of assurance that trading agreements will not be honoured. Members of migrant networks may play a role in overcoming such barriers by acting as mediator between the firm and potential trading partner. The objective of this research is to (1) determine the relationship between firms that export and the composition of their employees, and (2) how the Canadian immigration policy has shaped a firm’s ability to export. Specifically, this paper will explore if firms with foreign-born workers are more likely to export, if firms make hiring decisions based on the possibility of exporting, and if there is any evidence to suggest firms hire foreign-born workers to mitigate the information barriers discussed above.

Ananth Ramanarayanan is an Assistant Professor at Western University.

Related Data Sets
CEEDD, TEC

Related Research Themes
Industry and Firm Analysis, International

An extensive amount of literature has stated that immigrants may exhibit poorer economic performance than native-born citizens. There are three main reasons why this relationship may occur: (1) the human capital, such as the education and labour market experiences, may be lower for immigrants, (2) language proficiency tends to be lower among immigrants, and (3) immigrants may have weaker networks or live in areas that consist predominately of one ethnic group, known as enclaves. The purpose of this study is to explore another potential reason why immigrants’ economic performance is lower, specifically, financial literacy. Financial literacy allows agents to make more informed decisions regarding saving, investing, borrowing, etc. Evidence from surveys has documented that there are large variations in financial literacy across demographic characteristics such as gender, education, age, religion, and ethnicity. This project questions whether immigrants in Canada are financially sophisticated in terms of whether or not eligible immigrants take advantage of tax breaks. Higher levels of financial literacy may reflect higher levels of human capital, language proficiency and stronger social networks. Thus, this study will account for, or condition on language, education and networks (measured by the proximity of businesses or individuals with similar demographics).

Related Data Sets
CEEDD

Related Research Themes
Incomes, International

This project looks at the employment growth of firms in Canada. The analysis emphasizes that differences occur across firms. These differences relate to the size and age of a firm, along with industry and annual conditions. The purpose of the project is to capture, examine and determine the relative importance of the impact of size, age, industry and year on firm growth.

Related Data Sets
LEAP

Related Research Themes
Industry and Firm Analysis

This project aims to study how the signing of International Investment Agreements (IIAs) changes the structure of Canadian firms that trade and invest in IIA partner countries. The goal is to estimate how the investment protection portion of these agreements impacts Canadian firms’ decision to vertically integrate with its intermediate input suppliers in those countries or to horizontally integrate by expanding to new markets. The key issue is determining how much those agreements affect economic growth in Canada.

Additional dataset: Canadian Direct Investment Abroad (CDIA)

Related Data Sets
ASM-I, NALMF

Related Research Themes
Industry and Firm Analysis, International

This article takes advantage of new Canadian administrative linked employer-employee data to study the role of employers in explaining changes in inequality along two dimensions. First, we use information about the worker's employer to examine how within-firm and between-firm earning inequality evolved over the past decade. Second, we use firm-level productivity information to shed some light on the evolution of productivity inequality over the last decade. Finally, we interpret these findings in the light of current theories about increasing wage inequality and summarize how these results improve our understanding of the dynamics of productivity dispersion. More precisely, we link the changes in productivity inequality to changes in wage inequality to specifically address the question of how the two are closely connected or not.

Related Data Sets
CEEDD

Related Research Themes
Labour Markets

Both pollution and climate change are known to negatively impact the health and productivity of workers. Research has primarily focused on how these factors affect outcomes of developing countries and the agricultural sector. Little is known about the impact of air pollution and climate change on manufacturing plants’ in developed countries. In developed countries such as Canada, the agricultural sector accounts for a small share (6.6 %) of gross domestic product (GDP) relative to that of the manufacturing sector (approximately 11 %). The purpose of this research is to study how the productivity of Canadian manufacturing plants is affected by the interaction of temperature and air pollution. While both temperature and pollution individually affect manufacturing plants’ outcomes, a mix of both could amplify these affects.

Additional data set: National Pollutant Release Inventory (NPRI)

Related Data Sets
ASM

Related Research Themes
Industry and Firm Analysis, Labour Markets

The post-Great Recession (2007-2009) economy has exhibited a slow rate of recovery. This is especially evident when examining unemployment. One suggested underlying cause of this trend is the significant decline in new firms, or new entrants, during 2008-2009. In Canada, while there has been a slow decrease in unemployment, the employment rate has remained steady. Thus, it appears the ability to create jobs has not yet recovered since the Great Recession. This raises the question of what factors determine a firm’s status as a job creator. The firm entry rate in Canada is decreasing, while the job creation rate of firms who do enter the market is 1.5 to 2.5%. This is greater than the aggregate annual job growth in Canada. This trend shows firms that have an established position in the market are not net job creators, and new firms may be job creators. With these facts in mind, this study hopes to answer the following questions: (1) what factors affect the initial performance of new firms and (2) what determines the fact that some firms are high growth (job creators), while others rapidly shrink. The study will also focus on how constraints after a financial shock (i.e. the Great Recession) affect the entry decision of new firms.

Related Data Sets
NALMF, SFSME

Related Research Themes
Industry and Firm Analysis, Labour Markets

This project will assess research and development spillovers in a production function framework by adding research and development performed by other firms (“outside” research and development) as an input along with labour, tangible capital and the stock of research and development performed by the firm (“inside” research and development).

Additional data set: Scientific Research and Experimental Development (SR&ED)

Meyongwan (Daniel) Kim is an economist at the Centre for the Study of Living Standards

Rebekah Owusu is a PhD candidate at the University of Ottawa.

Related Data Sets
T2-LEAP

In this paper, we use linked employer-employe administrative tax data from Canada to estimate the impact of payroll taxes on a variety of firms and workers outcomes. At the firm-level, we use geographic and time variations in tax rates to identify the effect of payroll taxes on wage growth at the worker level. For one province, we exploit a clean overtime change in the payroll tax rate to estimate its impact on the firm's level of employment, average wage and productivity, with difference-in-differences models, taking into account firm-level unobserved heterogeneity. Additionally, taking advantage of the nature of linked data, we estimate wage equations with both fixed worker and firm fixed effects. We find no impact on employment and productivity but significant impacts on wages, implying that payroll taxes are passed almost entirely to workers in the form of lower wages.

Jonathan Deslauriers (HEC Montréal)

Jonathan Paré (HEC Montréal)
 

Related Data Sets
CEEDD

Related Research Themes
Industry and Firm Analysis, Labour Markets

The CDER firm data will be studied to estimate how long top productive firms tend to stay highly productive and what their productivity level tends to be before (and potentially after) they are at the top end of the productivity distribution. Also being examined is whether changes in firm productivity have different dynamics depending upon whether such changes are negative versus positive, or small versus large. This project could influence most modern macroeconomic models, which tend to embed very simple dynamic processes.

Related Data Sets
NALMF, TEC

Related Research Themes
Industry and Firm Analysis

The aim of the project is research the development and behavior of firms that operate in an economy affected by natural resource development and exploitation. Østenstad and Vermeulen (2016) provide a theoretical model that gives rise to various hypotheses surrounding the development of firms and their export decision in an economy that has the benefit of a natural resource windfall. The current project will apply this theoretical model to the Canadian case and data and test the hypotheses that come from the theoretical model.

The main research question is:
How are firms affected by an economy that experiences resource windfalls in terms of their sales, employment, wage costs, and export sales?

We aim to test the following hypotheses: Focusing on the non-resource related firms in a natural resource based economy, the expansion of natural resource production will lead to:

  • An expansion of manufacturing firms, in terms of new establishment, total sales and employment,
  • An expansion of the number of firms, who on average will have a relatively lower productivity
  • An increase in the observed average productivity among exporters and a decrease among non-exporters

We would like to further confirm the model’s mechanism that gives rise to an ambiguous effect on total export sales. Whereas the expansion of the entire sector should allow for more exporting firms, the increase in marginal costs will lead to a smaller share of firms that export. The data may further allow to observe how the size of the effect is related to the size of the natural resource sector, the distance from this sector and the regional government expenditures.

Related Data Sets
ASM

Related Research Themes
Industry and Firm Analysis

In this project, we will advance the findings of each of these papers by looking in detail at how workers move over their life course, examining in particular how multiple aspects of industrial change impact mobility. The analysis for this proposed research will draw on the Canadian Employer-Employee Dynamics Database (CEEDD), which contains rich data on both individual and firm-level characteristics that may motivate migration for close to two decades.

Nicole Denier (University of Alberta) and Federico Eichelmann-Lombardo (Western University)

Related Data Sets
CEEDD

Related Research Themes
Labour Markets

This project sets out to investigate the impact of immigrant business ownership and employment on Canada's international trade. We propose to use Canadian Employer-Employee Dynamics database connected with data on imports and exports for the empirical analysis. We propose to quantify the effects of immigrant owned firms and immigrant employees on the extensive and intensive margins of imports and exports for products with different degrees of differentiation. We also plan to extend the analysis to examine whether the contribution of immigrant business ownership to international trade is affected by the cultural/linguistic distance between the country of origin and Canada.

Huju Liu

Related Data Sets
CEEDD

Related Research Themes
Labour Markets

There appears to be a linkage between productivity and exporting and it is possible that immigration can indirectly influence firm productivity through that channel. There are also ways through which immigration may affect productivity depending upon the immigrant skill mix and how well immigrants match with jobs in the labour market.  This project will pursue two related issues:

1) how immigrants sort into different firms as they assimilate following arrival and how job referral networks play a role in that process; 

2) how firm-specific pay policies potentially affect immigrants and natives differently and thus may contribute to the immigrant-native wage gap.

Related Data Sets
CEEDD

Related Research Themes
Incomes, Industry and Firm Analysis, International, Labour Markets

All importing firms can then be allocated to one of four bins: two for direct importers(manufacturers and retailers), one for indirect importers (wholesalers) and one for the firms with a mix mode of imports (i.e. acting both as direct and as indirect importers). The relative importance of each of these modes can then be assessed either in terms of firm counts or in terms of import values. The main goal of this project is both to document the importance and characteristics of these bins and to test their main determinants using the case of import values only. The second goal of this project is to examine specific aspects of intermediation within the US/NAFTA context. This is linked to a fundamental aspect of intermediaries: their  advantage over direct importing is more significant for sources involving higher fixed and/or variable barriers to trade.

Data link: T2-Leap combined with import trade data, 2002-2012

Related Data Sets
ASM-I, T2-LEAP

Related Research Themes
International

Recent studies have indicated that the gains to shareholders from mergers and acquisitions (M&A) are a result of layoffs that occur post-merger. After an M&A, the firm undergoes restructuring. In this process, it is likely that some of the workforce at the combined firm may be laid off. While the wealth effects of shareholders are well documented, those of employees are not, especially in the Canadian context. The purpose of this study is to examine the well-being and wealth effect of workers that are employed at merged firms. Specifically, this study hopes to answer the following: (1) what is the effect on the level of employment after an M&A (2) what are the demographics (ex. age, gender, job skill level, family status etc.) of terminated employees and (3) what are the future employment characteristics of such workers (i.e. type, earnings, sector, and location).

Additional data set: Record of Employment (ROE)

Related Data Sets
CEEDD

Related Research Themes
Incomes, Industry and Firm Analysis, Labour Markets

This project consists of three projects:

Project 1 - Complementarity of Performance Pay and Task Allocation

Bryan Hong, Lorenz Keung and Mu-Jeung Yang

Complementary management practices are those that are interdependent and together reinforce one another to improve overall firm performance. Research has suggested that such complementarity between different management practices is one underlying cause of differences in performance outcomes among firms. The purpose of this study is to examine the complementarity between two specific management practices: pay-for-performance and decentralization, the dispersion of decision making from a central authority to subgroups of the firm. While these practices have been empirically investigated individually, little is known about how the interaction between decentralization and pay-for-performance may affect firm performance.

Project 2 - Barbarians at the Gate: How foreign competition affects intra-organizational conflict

Bryan Hong and Romel Mostafa

Cyert and March (1963) describe the firm as the combination of interdependent groups, which often have competing interests. It is no surprise that such competing interests can lead to conflict within firms, also referred to as intra-organizational conflict. The effects of intra-organizational are well studied. Research has indicated that the time managers spend managing conflicts is substantial, suggesting the cost of conflicts within the firm are significant. Little is known about how forces outside of the firm affect the likelihood and prevalence of conflict within a firm. The purpose of this study is to estimate how one specific external force, foreign competition, affects the occurrence and frequency of intra-organizational conflict in the Canadian context. This study uses data from the Workplace and Employee (WES) survey conducted by Statistics Canada.

Project 3: Incentives as a Moderator of Conflict During Organizational Change

Bryan Hong

When a firm experiences an organizational change or restructuring, it is likely conflicts that disrupt the firm will occur. This study focuses on how organizational changes affect the prevalence of conflicts and employee grievances filed within the firm.  As a measure for organizational changes, this study employs changes in organizational structure (ex. centralization, decentralization, outsourcing etc.) from the WES survey. This study also investigates how the presence of group level pay-for-performance incentives (ex. profit sharing plans) affect the frequency of firm conflicts.

Additional datasets: Labour Force Survey (LFS) & General Index of Financial Information (GIFI)

Romel Mostafa is an Assistant Professor at the Ivey Business School, Western University

Lorenz Kueng is an Assistant Professor at Northwestern-Kellogg

Mu-Jeung Yang is an Assistant Professor at University of Washington, Seattle

Related Data Sets
ASM, WES

Related Research Themes
Industry and Firm Analysis, International

This project examines the role that firms play in the economic assimilation of new immigrants to Canada. Because some firms pay more than others (even after conditioning on a worker's skill), two identical individuals working at different firms may be paid differently. The tendency of new immigrants to be employed at low-paying firms, and their propensity to move out of these firms, has important implications for their long-term economic success. This project analyzes the characteristics of firms who tend to employ immigrants, and most importantly, those that hire immigrants directly from abroad. This project speaks to the policy debate on the degree to which employers should be directly involved in immigrant selection in Canada.

Related Data Sets
CEEDD

Related Research Themes
Incomes, Industry and Firm Analysis, Labour Markets

Does the Canada-US Free Trade Agreement (CUSFTA) reduce resource misallocation in Canada? The implementation of CUSFTA can be viewed as a natural experiment which makes it ideal for estimating the causal effect of trade policy on the misallocation of resources. To do this, I use both static and dynamic panel models with data from the Annual Surveys of Manufactures (ASM) for the period 1980 to 1996. I use tariff rates from Trefler (2004) and measure resource misallocation using the dispersion in revenue total factor productivity (TFPR). This study sheds light on how reversion back to CUSFTA following a collapse of NAFTA might impact productivity in Canada due to changes in resource misallocation.

Related Data Sets
ASM

Related Research Themes
International

Asymmetric information, when one party in a transaction possesses more information than the other, is common in creditor-borrower relations. When proper and complete information is not available, creditors may not be able to assess the ability of a firm to repay debt. Thus, this problem of asymmetric information may cause creditors to ration loans, or not price debt efficiently (i.e. the price that truly reflects the position of the firm). This may limit access of funds to productive firms, especially Small and Medium Enterprises (SMEs), that are known to employ the majority of an economy’s workforce. Some mechanisms exist that may mitigate the problems associated with information asymmetry. For example, bank-firm relationships may complement available financial information. Through long-term relationships, banks may obtain “soft information” such as the quality of management, revenue volatility, customer loyalty, etc. The purpose of this paper is to determine if such bank-firm relationships improve debt pricing of SMEs and other frictions associated with asymmetric information.

Related Data Sets
NALMF, SFSME

Related Research Themes
Industry and Firm Analysis

How are business strategy and organizational structure related? We analyze the systematic alignment between strategy and structure as well as their implications for firm performance and innovation.

Related Data Sets
WES

Related Research Themes
Industry and Firm Analysis

Despite half a century of experience with environmental regulation in Europe and North America, there is still much debate over the likely impacts of environmental regulation. For example, many believe that regulation comes at the cost of economic growth in the regulated region and these costs outweigh any potential environmental benefit. While the regulation does have costs, it is important to understand the trade-offs between these costs and environmental benefits. This research is designed to help inform policymakers and the public about the costs and benefits of climate policy, by quantifying the productivity impact of British Columbia’s carbon tax in the manufacturing sector.

Related Data Sets
ASM

Related Research Themes
Industry and Firm Analysis, International

Themes

Incomes

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Industry and Firm Analysis

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International

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Labour Markets

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Data Sets

ASMAnnual Survey of Manufacturing

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ASM-IImport Registry Database

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CBSA CustomsCanada Border Service Agency Customs

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CEEDDCanadian Employer-Employee Dynamics Database

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CFACensus of Agriculture Longitudinal File

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CIPCapital and Investment Program

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LEAPLongitudinal Employment Analysis Program

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LWFLongitudinal Worker File

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NALMFNational Accounts Longitudinal Microdata File

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SFSMESurvey of Financing of Small and Medium Enterprises

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SIBSSurvey of Innovation and Business Strategies

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T2-LEAPT2-Longitudinal Employment Analysis Program

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TECTrade by Exporter Characteristics

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WESWorkplace Employee Survey

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Papers & Presentations

A key outcome of the Partnership is the creation and dissemination of research findings. These findings will be the basis for published articles in international and national journals, including special issues and special volumes.

June, 2018

Abstract. In this paper, we use linked employer-employee administrative tax data from Canada to estimate the impact of payroll taxes on a variety of firms and work-ers outcomes. At the firm level, we use geographic and time variations in tax rates to identify the e˙ect of payroll taxes on wage growth at the worker level. For one province, we exploit a clean overtime change in the payroll tax rate to estimate its impact on the firm’s level of employment, average wage and productivity, with di˙erence-in-di˙erences models, taking into account firm-level unobserved hetero-geneity. Additionally, taking advantage of the nature of linked data, we estimate wage equations with both fixed worker and firm fixed e˙ects. We find no impact on employment, productivity and profits, but significant impacts on wages, implying that payroll taxes are passed almost entirely to workers in the form of lower wages.

Author(s)

Jonathan Deslauriers (HEC Montréal)
Jonathan Paré (HEC Montréal)

Related Data Sets
CEEDD

Related Research Themes
Industry and Firm Analysis

Presented at Statistics Canada: Socio-Economic Workshop - Leading-Edge Business Micro Data and Updates on Access

April, 2018

This paper studies firm offshoring behaviour following the Canada-Peru Foreign Investment Protection Agreement (FIPA) enactment in 2007. This is achieved by using confidential Statistics Canada firm tax filing microdata merged with raw firm-level import microdata. While in the aggregate data, there is a large increase in Foreign Direct Investment (FDI) by Canadian firms and a change in the composition of Canadian firm imports from Peru from raw unprocessed ore to manufactured metals, the microdata show that the change is not simply offshoring by individual firms. FDI into Peru was in mining as opposed to manufacturing. Moreover, firms that increased their Peru investment did not reduce their Canadian employment, nor were they the same firms with large increases in imports. Hence, these findings in the microdata show that the large increase in investment to Peru was not associated with offshoring of Canadian firms.

Author(s)

Stephanie Houle is a PhD candidate in the Department of Economics, McMaster University

Related Research Themes
International

Keywords: Investment Agreements, Multinational Firms, Offshoring, Foreign Direct Invest-ment

JEL Codes: F13, F23, F53, L23

December, 2017

How do firms in high-income countries adjust to emerging market competition? We estimate how a representative panel of Canadian firms adjusts innovation activities, business strategies, and exit in response to large increases in Chinese imports. Whether firms invest in process or product innovation matters: on average, the number of process innovations declines more strongly than the number of product innovations. In addition, firms that initially pursue process innovation strategies and survive have higher profits ex-post, but are ex-ante more likely to exit. In contrast, firms that initially pursue product innovation strategies have higher profits if they survive, without significant impact on exit. Both empirical patterns are consistent with our theory, which suggests that innovation strategies do not ensure insulation against competitive shocks, but instead increase risk.

Author(s)

Lorenz Kueng (Kellogg School of Management & NBER)
Nicholas Li (University of Toronto)
Mu-Jeung Yang (University of Washington, Seattle)

Related Data Sets
WES

Related Research Themes
Industry and Firm Analysis

October, 2017

Using a sample of only three countries, Hsieh and Klenow (2014) find that firms grow at a slower rate in poorer countries than in richer countries. This paper asks whether their results can be generalized using uniquely well-suited comparable data from the World Bank Enterprise Surveys of 100 countries for 2006 to 2014. I confirm that firms in general grow at a slower rate in poorer than in richer countries. In addition, I establish that firm growth rate explains approximately 16 percent of GDP per capita variations.

Related Research Themes
Industry and Firm Analysis, International

Keywords: Employment, Firm growth rate, Patterns, Firm age, GDP

JEL Codes: O11, O47

September, 2017

July, 2017

Complementarity between different management practices has been argued to be one potential explanation for persistent performance differences across firms. Using detailed data on internal organization for a nationally representative sample of firms, we empirically test for the existence of complementary joint adoption of performance pay incentives and decentralization of decisionmaking authority for tasks. To address endogeneity concerns, we exploit regional variation in income tax progressivity as an instrument for the adoption of performance pay. We find systematic evidence of complementarity between performance pay and decentralization of decision-making from principals to employees. However, adopting performance pay also leads to centralization of decision-making authority from non-managerial to managerial employees. The findings suggest that performance pay adoption leads to a concentration of decision-making control at the managerial employee level, as opposed to a general movement towards more decentralization throughout the organization.

Author(s)

  • Bryan Hong, Ivey Business School, University of Western Ontario
  • Lorenz Kueng, Kellogg School of Management, Northwestern University & NBER
  • Mu-Jeung Yang, University of Washington - Seattle

June, 2017

A shift in population distribution toward older ages is underway in industrialised countries throughout the world and will continue well into the future. We provide a framework for isolating the pure effects of population aging on per capita GDP, employ the framework in calculations for twenty OECD countries, and derive the rates of productivity growth required to offset those effects. We consider also some labour-related changes that might provide offsets, for comparison with productivity.

Author(s)

  • Frank T Denton, McMaster University
  • Byron G Spencer, McMaster University

Presented at CEA 2017: Research from the Productivity Partnership

Related Data Sets
CIP, T2-LEAP

Related Research Themes
Industry and Firm Analysis, Labour Markets

Presented at CEA 2017: Data Schools

Author(s)

Brian Lewis, Chief Economist and Assistant Deputy Minister Office of Economic Policy at Ontario Ministry of Finance

Related Research Themes
Incomes, Industry and Firm Analysis, International, Labour Markets

Keywords: microdata, data access

Presented at CEA 2017: Data Schools

Related Data Sets
NALMF

Related Research Themes
Industry and Firm Analysis, International

Presented at CEA 2017: Data Schools

Author(s)

Thomas Storring is the Director in Economics and Statistics Division, Finance and Treasury Board, Nova Scotia Government 

Keywords: microdata, data access

Presented at CEA 2017: Data Schools

Author(s)

Guy Lacroix is a Professor at Université Laval

Keywords: microdata, data access

Presented at CEA 2017: Data Schools

Related Data Sets
CEEDD, NALMF, TEC

Related Research Themes
Incomes, Industry and Firm Analysis, Labour Markets

Presented at CEA 2017: Data Schools

Author(s)

Ted McDonald is a Professor at the University of New Brunswick.

Related Research Themes
International

Keywords: microdata, data access

Presented at CEA 2017: Data Schools

This paper uses mine-level data to study labour productivity in Ontario’s gold mining industry from 1920 to 1970. The ounces of gold produced by a mine worker are nearly identical in 1920 and 1970. Thus, the industry appears to experience no productivity gains over this period. In fact, labour productivity in the intervening years was nearly 30% lower than these values, raising concerns about the ability of the industry to re-main profitable given a fixed price for gold. Using a unique mine-level data-set for over 75 different mines comprising nearly 90% of the industry in Ontario, we perform a firm-level analysis of productivity. This analysis allows us to determine whether workers are in fact becoming less efficient over time, or whether other factors, such as entry and exit into the industry, declining quality of ore bodies, or changes in capital stock, are the primary drivers of this stagnation. We are also able to determine the impact that events such as a sudden 70% rise in the price of gold in 1934, the Second World War, and the subsidization of the industry in the late 1940s had on productivity.

Author(s)

  • Robert J Petrunia, Lakehead University
  • Karl Skogstad, Lakehead University

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: productivity, Gold Mining, Ontario

JEL Codes: D22, D24, L72, N52, Q3

Presented at CEA 2017: Research from the Productivity Partnership

March, 2017

Related Data Sets
CEEDD, TEC

Related Research Themes
Industry and Firm Analysis, International

Keywords: RDC, CDER

Presented at Data Day

Related Data Sets
ASM, ASM-I, CBSA Customs, CEEDD, CIP, CFA, LEAP, LWF, NALMF, SFSME, SIBS, T2-LEAP, TEC, WES

Related Research Themes
Incomes, Industry and Firm Analysis, International, Labour Markets

Presented at Data Day

Total Factor Productivity’s (TFP) growth during the 2002-2014 period in Canada has been only 0.16%. This figure is substantially smaller than that of the U.S. during the same period (1.33%), or for Canada during the 1970-2002 period (1.45%). We perform multiple counterfactual exercises to show that the lack of TFP growth cannot be accounted for by measurement issues in, nor misallocation of, factors of production. However, despite the lack of TFP growth Canada has experienced sustained income growth because on a prolonged period of appreciation of the terms of trade. In fact, computing TFP using real Gross Domestic Income (instead of real GDP) reveals a very similar performance in terms of productivity growth between Canada and the U.S., with productivity growth falling in 2002-2014 relative to 1970-2002 in both economies.

Author(s)

  • Juan Carlos Conesa, Stony Brook University
  • Pau S. Pujolas, McMaster University

Author(s)

Natalie Goodwin, Statistics Canada RDC Analyst, Western University RDC

Related Data Sets
ASM, ASM-I, CBSA Customs, CEEDD, CFA, CIP, LEAP, LWF, NALMF, SFSME, SIBS, T2-LEAP, TEC, WES

Related Research Themes
Incomes, Industry and Firm Analysis, International, Labour Markets

Keywords: RDC

Presented at Data Day

Author(s)

 Nell Hamalainen, Statistics Canada

Keywords: RDC, Longitudinal Administrative Database (LAD)

Presented at Data Day

Outline

Accessing business microdata for research purposes at the Canadian Centre for Data Development and Economic Research (CDER) at Statistics Canada

  • CDER basics
  • Data sets available for access to CDER
  • Application process
  • Future directions
  • Other information

Related Data Sets
ASM, ASM-I, CBSA Customs, CEEDD, CFA, CIP, LEAP, LWF, NALMF, SFSME, SIBS, T2-LEAP, TEC, WES

Related Research Themes
Incomes, Industry and Firm Analysis, International, Labour Markets

Keywords: CDER; microdata; data access

Presented at Data Day

January, 2017

All three global automakers currently manufacturing vehicles in Australia have announced their total shutdown of operations there by 2017. This shutdown has sparked some fears that Canadian auto manu-facturing may follow a similar trajectory. This article reviews the factors contributing to the closures in Australia and considers key structural, economic, and policy differences between the Australian and Canadian cases. The Canadian industry enjoys several structural advantages compared with Australia, chief among them its large and bilateral trade relationship with the United States. These advantages suggest that the Canadian industry has a better prognosis.

Les trois constructeurs mondiaux d’automobiles actuellement pre´sents en Australie ont annonce´ qu’ils mettront fin a` toutes leurs ope´rations dans ce pays en 2017. Ces fermetures annonce´es ont fait naıˆtre la crainte que le secteur de la construction automobile suive la meˆme voie au Canada. Dans cet article, je de´cris les facteurs qui ont amene´ les constructeurs automobiles a` fermer leurs usines en Australie, et j’analyse les diffe´rences importantes, sur le plan structurel, e´conomique et des politiques publiques, qui existent entre ce pays et le Canada. J’explique entre autres que le Canada, par rapport a` l’Australie, profite de nombreux avantages structurels, au premier rang desquels se trouve l’importante relation commerciale bilate´rale que le pays entretient avec les E´ tats-Unis. Ces points forts me permettent d’affirmer que l’industrie automobile canadienne a un meilleur avenir au Canada.

http://utpjournals.press/doi/10.3138/cpp.2016-023

Author(s)

Jim Stanford, Department of Economics, McMaster University, Hamilton, Ontario

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: automotive manufacturing, Canada, Australia, deindustrialization, construction automobile, Canada, Australie, de´sindustrialisation

The Canadian automotive industry underwent substantial restructuring between 2005 and 2014. This article draws on establishment-level data to examine these changes as they relate to both automotive assembly and automotive parts manufacturing. It also elucidates the limitations of using official govern-ment statistics to study the automotive industry. In addition to analyzing changes to the structure and composition of the industry, our data demonstrate that the industry employs far more people than are reported in official government statistics. We conclude that improvements to data collection methods are important for policy-makers to develop effective supports for the automotive industry.

L’industrie automobile canadienne a fait l’objet d’une importante restructuration entre 2005 et 2014. Dans cet article, a` partir de donne´es recueillies au niveau des usines, nous examinons ces changements, lie´sa` la fois a` l’assemblage et a` la fabrication des pie`ces. Nous montrons e´galement les limites que pose l’utilisa-tion des statistiques gouvernementales officielles pour e´tudier l’industrie automobile. En plus d’analyser les transformations dans la structure et la composition du secteur, nous de´montrons, a` partir de nos donne´es, que celui-ci emploie beaucoup plus de gens que ne le rapportent les statistiques gouvernementales officielles. Nous en concluons qu’il est important d’ame´liorer les me´thodes de collecte des donne´es pour que les de´cideurs politiques puissent soutenir efficacement l’industrie automobile.

http://utpjournals.press/doi/10.3138/cpp.2016-026#d973e61

Author(s)

Brendan Sweeney, Automotive Policy Research Centre, McMaster University, Hamilton, ON

Greigory D Mordue, Department of Economics, McMaster University, Hamilton, ON

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: industrie automobile, restructuration, codes du Syste`me de classification des industries de l’Ame´rique du Nord (SCIAN), automotive industry, restructuring, employment, NAICS codes

Turnover within an industry creates a turbulent situation for workers, where a firm's shutdown leads to permanent layoffs. Using data drawn from the Longitudinal Worker File, a Canadian firm-worker matched employment database, we investigate the impact of industry shutdown rates on the rate of permanent layoffs and workers' wages. We quantify the effects of permanent layoffs on worker outcomes such as employment status and earnings. These effects vary across industries, firms and workers. Further, selection induces a bias in the effect of shutdown rates on permanent layoffs and wages. After accounting for firm shutdown (selection), we find that an increase in industry shutdown rates generally increases the probability of permanent layoffs and decreases workers' wages.

Paper: https://doi.org/10.1186/s40172-017-0057-0

Note: presentation is from 2014

Author(s)

Kim P. Huynh, Bank of Canada

Yuri Ostrovsky, Statistics Canada

Related Data Sets
LWF

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: Worker separation, Firm survival, Selection

JEL Codes: J24; J31; J63; C35

During the 1980s, Canada’s automotive manufacturing assembly landscape changed when five new manu-facturers from outside of North America made large-scale investments. The industry shifted from one focused on US-owned corporations to one with a much more international orientation. Because of the success Canada enjoyed in attracting foreign automotive investment, one might conclude that those engaged in the process did so with a coherent plan and that the period was marked by one success after another. The reality, however, is that several misses also occurred. Layering archival sources and inter-views with secondary sources, this article contributes to the history of the economic development of Canada’s automotive industry. Through this, important lessons for policy-makers are offered: The process of goal and policy congruence is demonstrated; one sees how dominant personalities can override governance mechanisms, even in large corporations; and one observes the capacity of exogenous factors to affect the best-laid plans.

Au cours des anne´es 1980, le paysage de l’industrie automobile canadienne s’est transforme´, alors que cinq nouveaux manufacturiers venant de l’exte´rieur de l’Ame´rique du Nord ont fait des investissements importants au pays. Le secteur, jusqu’alors domine´ par des inte´reˆts ame´ricains, s’est ainsi beaucoup diver-sifie´ sur le plan de la proprie´te´ des entreprises. Comme le Canada a alors re´ussi a` attirer des investisse-ments e´trangers, on pourrait penser que ceux qui ont participe´ a` ce processus avaient un plan cohe´rent, et que les re´ussites se sont succe´de´ ;lar´ealite´, toutefois, est qu’il y a e´galement eu des lacunes et des e´checs. Graˆce a` des archives et a` des sources secondaires, cet article pre´sente le de´veloppement e´cono-mique de l’industrie automobile canadienne durant cette pe´riode. Les de´cideurs politiques peuvent en tirer d’importantes lec¸ons : il faut s’assurer de bien arrimer les objectifs et les politiques ; des personnes ayant beaucoup de pouvoir peuvent agir sans tenir compte des me´canismes de gouvernance, meˆme dans de grandes entreprises ; et des facteurs exoge`nes peuvent entraver la re´alisation des plans meˆme les mieux conc¸us.

http://utpjournals.press/doi/10.3138/cpp.2016-022

 

Author(s)

Greigory D. Mordue, Department of Economics, McMaster University, Hamilton, Ontario

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: automotive, Canada, failure, investment attraction, foreign direct investment, industrie automobile, Canada, e´chec, promotion de l’investissement, investissement e´tranger direct

The Partnership co-sponsored an issue of Canadian Public Policy/Analyse de politiques, edited by Charlotte Yates, Greigory Mordue and Brendan Sweeney 

http://www.utpjournals.press/toc/cpp/43/S1

Author(s)

Edited by:

  • Charlotte Yates
  • Greigory Mordue
  • Brendan Sweeney

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: automotive, Canada

June, 2016

This paper investigates the relationship between employee relations as tracked by the widely used ESG (formerly KLD) database on corporate social responsibility (CSR) and innovation as measured by patents and patent citations. The employee relations variables we use include factors that affect financial incentives, particularly profit-sharing plans, stocks options and stock ownership, along with non-pecuniary factors that would affect morale and institutional loyalty. Focusing on the high-technology sector of the U.S. economy, we find that both good financial and good non-pecuniary employee relations have a positive effect on patenting.

http://dx.doi.org/10.1080/10438599.2016.1202523

Author(s)

James A. Brander is a Professor in Sauder School of Business, University of British Columbia 

Wei Zhang is an Assistant Professor in the School of Finance, Shanghai University of Finance and Economics 

Keywords: Patents, innovation, employee relations

JEL Codes: M14, O31, J5

January, 2016

This paper contributes to the recent and growing literature on optimal top marginal income tax rates. It computes optimal marginal tax rates for top earners in a Bewley-Aiyagari type economy explicitly accounting for entrepreneurs. Entrepreneurs make up more than one third of the highest-earning one percent in the income distribution despite representing less than ten percent of the population. They are thus disproportionately affected by an increase in the top marginal income tax rate. Since entrepreneurs overall also employ half of the private sector workforce, such policy changes can have important repercussions for aggregate labor demand and productivity. In the model households face an occupational choice between working for the market wage or starting their own business. Borrowing constraints induce entrepreneurs to save in order to grow. Consistent with the data, entrepreneurs significantly influence aggregate productivity, generate 50 percent of total output, and account for 40 percent of taxpayers in the top tax bracket. Nonetheless, the welfare maximizing top marginal tax rate amounts to 82.5 percent, and the revenue maximizing one to 90 percent. A steady state comparison between the benchmark economy featuring the current US tax system and the economy with the welfare maximizing top marginal tax rate illustrates the underlying mechanisms. The substantial increase in taxes leads to a large degree of redistribution, yielding sizable welfare gains for low-income working and entrepreneurial households. The welfare gains decline with income for workers, as middle-income workers are hurt by lower equilibrium wages. These lower wages however benefit medium-sized entrepreneurs and enable them to grow, such that all entrepreneurs except those directly affected by the higher tax experience considerable welfare gains, and the size of the entrepreneurial sector grows.

Author(s)

Bettina Brüggemann is an Assistant Professor at partner McMaster University

Related Research Themes
Incomes, Industry and Firm Analysis, Labour Markets

Keywords: Income tax rate

JEL Codes: H2; L26

August, 2015

This paper provides a theoretical and empirical analysis of the effects of nominal exchange rate move-ments on cross-border travel by consumers and on retail firms’ sales. We develop a search-theoretic model of price-setting heterogeneous retailers and traveling consumers who face nominal exchange rate shocks. These exchange rate shocks act as both a supply side shock for retailers though imported input prices and a demand side shock though their effect on the propensity for consumers to cross the border and shop at foreign retail stores. The model provides predictions regarding relationships between firm and regional characteristics and the magnitude of the effects of nominal exchange rate fluctuations and resulting cross-border travel activity on retailers’ sales. We use our theoretical framework to motivate an empirical methodology applied to Canadian firm and consumer level data from 1987 to 2007. Our findings indicate that an appreciation of the Canadian dollar substantially increases cross border travel which in turn has a significant negative effect on the sales of Canadian retailers. These effects diminish with the distance of the retailer from the border and with the shopping opportunities available at relevant US destinations. Using counterfactual experiments, we quantify the effects of more restric-tive border controls after September 2001 which discouraged cross-border trips and reduced retailer losses from cross-border shopping as well as the effects of increased duty free allowances which raised cross-border trips and reduced retailer sales.

Author(s)

Jen Baggs is an Associate Professor at the University of Victoria

Beverly Lapham is a Professor at Queen's University

Related Data Sets
T2-LEAP

Related Research Themes
Industry and Firm Analysis, International

Keywords: International Price Differences; Firm Dynamics; Exchange Rate Pass-Through; Cross-Border Shopping

JEL Codes: F10; F14; L81

May, 2015

A large portion of small business in Canada is organized as Canadian Controlled Private Corporations. There were 1.7 million such CCPCs in Canada in 2010, compared to about 2 million tax filers with net self-employment income of at least $5,000. Much attention has been paid to the performance of these predominantly small and mid-sized businesses in terms of their role as job creators (e.g. Dixon and Rollin, 2014). More recently Wolfson et al (2014) examined the impact of these private corporations on income inequality and found that CCPC incomes disproportionately affect top income shares. While important to the economy and having an effect on income inequality, little is known about the owners of these corporations. This paper builds on a linkage of Canadian controlled private corporation (CCPC) income tax returns with a sample of their owners' individual income tax returns. Some of the results may be surprising. For example, owners of CCPCs are not necessarily concentrated in Canada's largest cities. Among their top industrial sectors are agriculture, law and medicine. But likely not so surprising is that these owners are concentrated in the highest income groups. The paper explores the incomes of owners of CCPCs in relation to the incomes of the self-employed and various investment incomes (limited partnerships and net rental income), and provides the first ever portrait of this important segment of Canada's economy.

Author(s)

Brian Murphy & Yan Zhang, Statistics Canada

Related Research Themes
Industry and Firm Analysis

Research on Canada's distribution of income, especially the upper tail, has been greatly aided by the increasing availability of income tax data. Until recently, these data were restricted to individuals' income tax returns. However, a novel linkage of the corporate income tax returns of Canadian Controlled Private Corporations (CCPCs) has begun enabling more comprehensive analyses of individuals' incomes. The reason is that many of the 1.7 million CCPCs in Canada are useful for tax planning purposes. As a result, some portion of incomes received beneficially by individuals, i.e. in the hands of their CCPCs, does not appear on their individual income tax returns. However, undertaking this kind of analysis has required significant methodological investment and innovation. Individual (T1) and corporation (T2) income tax returns, plus their associated schedules (e.g. GIFI, S50) and information slips (e.g. T4, T5) are primarily collected for the administration of the Income Tax Act; they are not designed for research. This paper describes the methods developed in order to allow these valuable data to be used for research purposes. Record linkage is one of the central methods, along with calendarization, but database management and careful structuring of the many steps in assembling the final "analysis ready" data sets are essential. Finally, it is necessary to assess the quality of the resulting data files.

Author(s)

Yan Zhang & Brian Murphy, Statistics Canada

Keywords: Public Economics, Taxation, Fiscal Policy; Business Admin., Marketing, Accounting

Author(s)

Kim P. Huynh works at the Bank of Canada

Related Data Sets
ASM, ASM-I, CBSA Customs, CEEDD, CFA, CIP, LEAP, LWF, NALMF, SFSME, SIBS, T2-LEAP, TEC, WES

Related Research Themes
Incomes, Industry and Firm Analysis, International, Labour Markets

Keywords: CDER; proposal; microdata

JEL Codes: Y9

January, 2015

The conditions under which profit sharing affects workplace productivity have never been fully understood. Using panel data, this paper examines whether there is any link between adoption of an employee profit sharing plan and subsequent productivity panels. Overall, we find a significant link between adoption of a profit sharing program and subsequent productivity growth in both panels, but only among establishments that utilize work teams. growth in Canadian establishments, and whether this relationship is affected by various contextual factors, particularly use of work teams. In so doing, we use both three and five-year panels. Overall, we find a significant link between adoption of a profit sharing program and subsequent productivity growth in both panels, but only among establishments that utilize work teams.

http://proceedings.aom.org/content/2015/1/12980.short?rss=1

Author(s)

Richard Long, University of Saskatchewan

Related Data Sets
WES

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: productivity; Employee profit sharing; teamwork

JEL Codes: D2, C3

May, 2014

Much has been said about the status of innovation in Canada. Attention has been drawn to a paradox concerning the high quality of scientific research in Canadian academia and the lack of sufficient business innovation in Canadian industry. This presentation uses empirical data to show that the paradox is based on several myths about business innovation. The reality of Canadian industry does not back them up. Business innovation has been the key contributor to enhanced competitiveness and economic growth. The indiscriminate use of innovation as a buzzword has created a fog of confusion leading to inappropriate action. Some people still think of innovation narrowly in terms of science research and technology R&D - the first myth to be dispelled. Other myths discussed in this paper concern the myth that Canadian industry does not invest enough in innovation, the myth that innovation results are proportional with investments, the myth that productivity (gains) is a good metric for managing innovation, etc. The reality is that business innovation results are mostly a matter of (adequate) firm-level management that must be comprehensive, competitively driven, metrics-based and implemented methodically with the latest technics and tools. The presentation concludes with some of the factors leading to tangible performance innovation.

Author(s)

Sorin Cohn, BD Cohnsulting Inc.

Related Research Themes
Industry and Firm Analysis

The stock of human capital of the firm is an important determinant of its innovation performance. As such, any increase in this stock through firm-sponsored training should have a significant impact on innovation. We test this hypothesis using detailed information on the firms' human capital investments and innovation performance using the Canadian Workplace and Employee Survey 1999-2006. Our results using fixed workplace-effects or allowing for time-varying productivity shocks show that increases in both on-the-job and classroom training lead to more product and process innovation. We then investigate whether innovation can serve as another channel through which training affects productivity.

Related Data Sets
WES

Related Research Themes
Industry and Firm Analysis, Labour Markets

Keywords: Firm Investment; Capital; Data Availability; Human Capital

JEL Codes: J24; L2

Using German firm-level innovation survey data, I find that firms that vary in their export activity exhibit different innovation behaviour in a manner consistent with a life-cycle theory of the firm. By exploiting the pseudo-panel nature of the data, I use within-firm estimates to show that as firms become better exporters, their expenditure share on innovation increases and they perform more product innovation relative to process innovation. I also show that in stable exporting spells, firms' innovations are less likely to be for the purposes of expanding their product ranges, finding new target groups, and more likely to be for replacing discontinued products and reaching international markets. In addition, firms in stable exporting spells perform innovations that are less "new": these innovations are less likely to require patenting, registering of designs, research, and development. To frame the empirical evidence, I develop a dynamic trade model with innovation. Firms must go through an experimental stage to find their "ideal" product to produce. Firms can also engage in sustaining innovation, which will lower their probability of exogenously going out of business. I show that, under model parameter restrictions consistent with the empirical evidence, firms will only export after finishing their experimental stage. Exporters will be more likely to perform sustaining innovations, since the per-period profits are higher for exporting firms that have completed their experimentation phase.

Author(s)

Jeff Chan is an Assistant Professor at Wilfrid Laurier

Related Research Themes
Industry and Firm Analysis, International

October, 2013

June, 2013

This paper studies the effects of plant control changes on plant survival. A unique feature of the paper is that it groups new born plants as born-domestic and born-foreign, and groups plant control changes as foreign acquisitions and domestic acquisitions, and then analyzes the effects of foreign acquisitions and domestic acquisitions on the duration of born-domestic and born-foreign plants respectively. The differentiation of acquisitions and new plants along the foreign-domestic dichotomy helps disentangle ownership effects and acquisition effects, and thus could effectively compare which acquisition works better for which type of plants. Using 26 cohorts of plants born in Canada between 1973 and 1998, the paper finds that both foreign acquisitions and domestic acquisitions significantly increase life durations of born-domestic plants, although domestic acquisitions generate larger effects. For born-foreign plants, acquisitions do not seem to change their life durations.

Author(s)

Yanling Wang

Related Data Sets
ASM

Related Research Themes
Industry and Firm Analysis

Keywords: Foreign Acquisition, Domestic Acquisition, Plant Survival

JEL Codes: F2; L1

Using recently obtained estimates of equity risk premia and the weighted average cost of capital for the Canadian telecommunications sector (Law & Ntantamis 2012), we estimate productivity growth in the Canadian cable television industry using an unbalanced panel of plant-level observations for the period starting with the move to rule-based regulation in 1986 and continuing through the period of gradual deregulation. The results demonstrate the relative importance to productivity growth of factors such as the rate of technological improvement, shifts in regulatory environment, and transformations in the nature of competition and firm organization, all of which display significant changes over this period, even while estimates of risk premia in the Canadian telecommunications show remarkably stability over the past three decades.

Author(s)

Stephan M. Law
Christos Ntantamis

Keywords: Industrial Organization; Health Economics

In this paper, we study Canada's Capital Pool Company (CPC) program. On the surface, the program is similar to U.S. blind pool programs which were subject to a number of frauds during the 1980s. However, in Canada, under the CPC program, VC-like governance mechanisms are placed on the firm's founders, and significant regulations are placed on the firm's underwriters, in an attempt to increase the quality of firm founders and to provide protection to investors. This study documents how the program has expanded over time from being based solely in one province in Canada to being adopted by regulators, issuers, and investors from many jurisdictions. In addition, we provide evidence that the quality of firms using the program to raise capital has been increasing over time and the incidence of fraud in this marketplace has been declining as a result. We also document an increase in the quality of the underwriting firms supporting CPC IPOs.

Author(s)

Ari Pandes
Michael J. Robinson

Related Research Themes
Industry and Firm Analysis

Keywords: Public equity market; Entrepreneurial firms; Canada's Capital Pool Company

JEL Codes: L26; H54

May, 2013

Following Bloom and van Reenen (2007), a management practices index is build using a wide array of management practices indicators from the Survey of Innovation and Business Strategy 2009 (SIBS) to assess the link between management practices, competition and performance of enterprises in Canada. We found large differences in the management practices index distribution across industries, especially in the non-manufacturing sector. The regression results suggest that firm size and location of the head office (outside Canada) are positively correlated with management practices. In terms of competition, the correlation with management practices depends on how competition is measured, but the presence of a multinational enterprise in the enterprise main market is the only variable with a systematic positive sign. Analysis of the relationships between i) management practices and innovation and ii) management practices and enterprise performance, measured by sales and profits per employees, are also presented.

Author(s)

Dany Brouillette
Dany Ershov

There has been considerable discussion of a shortage of skilled information and communications technology (ICT) workers in Canada (Industry Canada, Improving Canada's Digital Advantage, 2010; IBM, Fast Track to the Future, 2012; Information and Communications Technology Council, Outlook for Human Resources in the ICT Labour Market, 2011-2016, 2011). Other research has identified relatively low use of ICT as a key factor hampering Canadian productivity growth Deloitte, The Future of Productivity in Canada, 2012). While an ICT worker "shortage" means different things to different people, it generally would imply that (a) the number of ICT workers and (b) the wage incomes of ICT workers should be increasing relative to other workers. We will provide empirical evidence on these implications using Canadian taxfiler data (the Statistics Canada Longitudinal Administrative Database) from 2005 to 2010. While occupation is not available for all workers in these data, from 2005 to 2010 there is consistent industry 3-digit coding using the North American Industrial Classification System (NAICS). Hence some of our exploratory analysis will focus on workers in industries with NAICS codes 517 (Telecommunications) and 518 (Data processing, hosting, and related services. Occupation is available for immigrants at time of landing. Hence another strand of exploratory analysis will use those same years and focus on immigrants who landed with National Occupation Code 217 (Computer and information systems professionals).

Author(s)

Yan Zhang

The positive link between international trade and productivity is well established. However, research on magnitude and consequences of internal trade barriers, which inhibit the efficient geographic distribution of production within a country, is limited. Unique Canadian data provides an ideal opportunity to measure the magnitude - and impact on productivity - of barriers to internal trade. Using a flexible, micro-founded approach, we measure internal trade barriers between Canadian provinces. We find between-province trade costs average 30%, rising to nearly 50% in poor regions, net of distance effects. We then adapt a new-trade model to estimate the productivity impact of these barriers. Eliminating inter-provincial trade barriers increases productivity by over 15% in the median province and by over 8% for Canada as a whole, accounting for nearly half the productivity gap with the United States. For comparison, we find these benefits are larger than lowering international trade barriers by 20%. Internal trade barriers also account for over 40% of the regional income inequality across provinces. Using our flexible measure of trade costs between provinces over time, we can estimate the change in trade costs from changes in internal trade policies, such as the Agreement on Internal Trade. Preliminary results indicate average bilateral trade costs fell by slightly over 10% following implementation of the AIT.

Author(s)

Jennifer Winter
Trevor Tombe

Related Research Themes
International

Keywords: Internal trade; Productivity; Regional economics development

JEL Codes: F4; F1; R1

Despite the elimination of tariff barriers between Canada and the United States, the volume of trade between the two countries has been less than would be expected if there were no border. While considerable work has been done to gauge the degree of integration between the Canadian and U.S. economies through trade, relatively little analysis has parsed out the underlying costs for cross-border trade. The costs of crossing the border can be divided into formal tariff barriers, non-tariff barriers, and the cost of the transport system itself. This paper focuses on the latter by estimating the cost of shipping goods by truck between Canada and the U.S. during the 1994-to-2009 period, a period that encompasses the pre- and post 9/11 security regimes. The analysis assesses the degree to which costs to ship goods by truck to and from the U.S. exceed those within Canada by measuring the additional costs on a level and ad valorem basis. These costs are further broken down into fixed and variable (line-haul) costs. Higher fixed costs are consistent with border delays and border compliance costs that are passed on to the consumers of trucking services. Line-haul costs are influenced by difficulties finding backhauls for a portion of the round-trip that, in turn, may differentially affect the cost of the export and import legs of a cross border trip depending on the balance of truck-borne trade between the two countries.

Author(s)

Mark Brown

Related Research Themes
International

High Growth Firms (HGFs) are increasingly cited as important contributors to economic growth. They are credited not only with superior job creation, but also with being agents of creative destruction. However, empirical researchers have had difficulty establishing the nature and magnitude of their contribution. The study of HGFs also suffers from definitional ambiguity and the lack of a rigorous theoretical framework with which to analyse them. Most studies on HGFs choose a single measure of firm size, such as total employment, and an arbitrary threshold for growth. But studies on firms and firm growth more generally emphasize that firm growth is highly heterogeneous. Some firms grow by adding jobs, some by merging or acquiring other firms. Others grow in ways captured better by sales or assets. Furthermore, their growth may be steady or erratic. Thus, it is not clear that a single measure and definition of high growth will sufficiently capture the significance of HGFs. This study explores the nature and significance of Canadian High Growth Firms using Statistics Canada's GIFI-T2LEAP 1984-2009. This administrative database covers all firms in the Canadian economy and allows us to measure firm growth along multiple dimensions, including employment, sales and assets. We establish that high growth is indeed a heterogeneous phenomenon, a show how this heterogeneity depends on firm age, size, location and industry.

Author(s)

Jay Dixon

Related Research Themes
Industry and Firm Analysis

March, 2013

Interest in the estimation of production functions and the measurement of productivity has a long history in economics. The concept of productivity is a measure of the e°ciency of an economy, an industry, or a ˝rm. In this paper we will focus the discussion on ˝rm-level productivity, but many of the ideas presented apply to more aggregate notions as well. The easiest way of understanding ˝rm-level productivity is to consider two ˝rms with the same level of input usage. If ˝rm 1 produces more output than ˝rm 2, it is considered to be more productive. This simple notion was notoriously di°cult to formalize. The ˝rst notions of productivity were focused on single-input measures such as the amount of output per worker produced by a ˝rm, as these measures could be computed from readily available data.

Related Research Themes
Industry and Firm Analysis

This report will provide an overview of methods used by statistical agencies to encourage, support, and enhance research access to data for the purpose of generating new knowledge. Quite a few reports and scientific articles have addressed the issue before, and we will be highly indebted to that literature. To a summary of that literature, we hope to provide some recent developments and experiences derived from a decade of working with systems that increase access as both researchers as well as data providers. The report will focus on the data provided by statistical agencies, but it should be understood that government agencies other than a National Statistical Office (NSO) may acquire that function. While excluding the legal background limiting or permitting such data collection and provision, we will highlight some alternate sources and methods, prior to concluding. By its very nature, releasing information increases the amount of data on persons, households, and firms available to society, sometimes to the point of infringing on the privacy expectations of those entities. Statistical agencies and their partners aim to balance the risk of that happening with the benefit of knowledge gained from the increased information, for the larger benefit of society. Abowd (2013) provides a overview over the economics of such an arbitrage. This report, and most of the literature, provide little guidance to what the optimal balance may be, and we will remain silent on the final decision, which remains a political decision, rather than a technical or statistical decision. The report will in general describe protection and access mechanisms in general terms, without specific reference to business or establishment data (henceforth referred to as “business data” for simplicity), since most such mechanisms apply to business, establishment, individual, and household data symmetrically. We will point out the issues that apply to the access to business data specifically at appropriate points in the discussion.

Related Research Themes
Industry and Firm Analysis

Keywords: Research Access

JEL Codes: Y9

The digital economy and technological innovations have been the transformational force for most nations over the last decade. Countries that lead in productivity and economic growth, e.g.,the U.S., benefit tremendously from their firms’ successful exploitation of different elements of the digital economy in tandem with policy support. For example, until recently, Internet retailers in the U.S. were not required to collect taxes from a consumer unless the retailer had a nexus in the consumer’s state. This has arguably facilitated the growth of e-commerce and made it an important part of the overall economy. Today, businesses and individuals are interacting in new and complex ways in the digital economy, with rapid technological advances contributing to exponential growth in data, generating compelling research questions. The ability to analyze and understand different facets of the current economy – to generate insights about these new and intriguing phenomena and to effectively leverage these developments to maximize economic growth – pose important challenges for modern organizations and policy makers. As expected, existing research has been instrumental in understanding and addressing some of these challenges associated with the digital economy. New research is continually making meaningful contributions to firms’ strategies and informing economic policy; albeit, there is room to do much more. With the ever changing nature of technology, these opportunities will never cease. At the risk of oversimplifying a growing and diverse literature, this commentary provides a brief glimpse of the existing works and highlights some interesting outstanding issues that warrant attention from the research community and that can now be studied with data made available from Statistics Canada.

It is well recognized that Canada has been lagging in the digital economy and in productivity compared to other developed nations, especially the U.S. Unfortunately, a similarly dismal picture exists in terms of research utilizing data from Canadian sources. As a result, an understanding of issues related to the Canadian digital economy is significantly lacking. While the lack of data has been the primary barrier for research studies, the reality is that Canadians have been profoundly impacted by the digital revolution. Canada’s proximity to the U.S., the increasing presence of U.S. companies in the Canadian market, a resurgence of advanced technology based manufacturing in the U.S., and rapid technological advancements in other competing nations are just some examples of how the insulation of Canadian businesses is dissipating. Canadian firms cannot hide from the digital economy in the long run, rather they need to embrace it. So, research informed by Canadian data will not only provide a much needed and better understanding of the digital economy, but will also likely make significant contributions to theoretical knowledge building.

In the following sections, I discuss some of the important aspects of the digital economy and how the unprecedented access to administrative and survey data from Statistics Canada opens tremendous opportunities to answer many research questions, such as the relationships between competition and firm productivity, efficiency, innovation, and technological growth.

Related Data Sets
SIBS

Related Research Themes
Industry and Firm Analysis

Keywords: Economic Development, Digital Economy, Technology

JEL Codes: O10, O3

November, 2012

October, 2012