Archived — Working Paper Number 29, The Productivity Gap between Canadian and U.S. Firms, April 1999
Strategic Policy Sector
Economic Research and Policy Analysis Branch
The goal of this paper is to measure the productivity gap between Canadian and U.S. firms, and to investigate why Canada's productivity performance has deteriorated compared to that of the United States since 1985. The paper compares productivity levels between firms in five broad sectors in the two countries since that date. To do this it uses firm-level data from the Compustat and Compact Disclosure data bases, supplemented by industry data from statistics Canada, the U.S. Department of Commerce, and Jorgenson's capital, labour, energy and material (KLEM) data base. The five broad sectors examined are manufacturing; mining; transportation, communications and utilities (TCU); retail and wholesale (trade); and services. We then consider differences in labour quality, research and development (R&D), capacity utilization, firm size and returns to scale as possible explanations for the gap and the deterioration in each sector. In addition, we explore the difference in industrial structure for manufacturing.
Catalogue number: C21-24/30-1999
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