Participation in Export Markets and Productivity Performance in Canadian Manufacturing

Abstract

In this paper, we explore the linkages between export-market participation and productivity performance in Canadian manufacturing plants. We also examine differences in the effect of exporting on productivity between foreign-controlled and domestic-controlled plants, and between young and older plants. We find that export participation improves productivity. The effect is much stronger for domestic-controlled plants than for foreign-controlled plants. We interpret this as evidence that it is the international orientation or globalization of a firm rather than ownership per se that is important for productivity growth. We also find that exporting matters more for young businesses than for older businesses.

Keywords: exports, productivity, multinationals, self-selection

JEL Classification: F1, O4