Archived — Working Paper Number 31, Are Canadian-Controlled Manufacturing Firms Less Productive than their Foreign-Controlled Counterparts? February 2000
Strategic Policy Sector
Economic Research and Policy Analysis Branch
The purpose of this paper is to analyse the multi-factor productivity (MFP) gap between Canadian- and foreign-controlled manufacturing firms. The evidence from micro (firm-level) data suggests that Canadian-controlled firms, on average, were 25 percent less productive than their foreign-controlled counterparts over the 1985-88 period. The MFP gap, however, narrowed to about 16 percent during the 1989-95 period. Labour quality, unionization, firm size, and industry dummies are significant determinants of inter-firm variations in productivity levels. However, they did not contribute to the MFP gap between Canadian- and foreign-controlled firms. In addition, contrary to popular perceptions, Canadian-controlled firms are not concentrated in low-productivity industries.
Catalogue number: C21-24/31-2000
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