Bigger Establishments in Thicker Markets: Can We Explain Early Productivity Differentials between Canada and the United States?

37 Pages Posted: 30 Nov 2005

See all articles by Kris Inwood

Kris Inwood

University of Guelph - Department of Economics

Ian Keay

Queen's University - Department of Economics

Abstract

We use establishment-level data describing manufacturers located in 128 border and near-border counties in Michigan, New York, Ohio, Pennsylvania, and Ontario to calculate Canadian relative to U.S. total factor productivity ratios for 25 industries. The data have been compiled from the manuscripts for the 1870 U.S. and 1871 Canadian census of manufacturing. Our results illustrate that the average U.S. establishment was approximately 7% more efficient than its Canadian counterpart in 1870/71. When we control for establishment size and market density the U.S. productivity advantage shrinks to slightly less than 3%.

Suggested Citation

Inwood, Kris and Keay, Ian, Bigger Establishments in Thicker Markets: Can We Explain Early Productivity Differentials between Canada and the United States?. Canadian Journal of Economics, Vol. 38, No. 4, pp. 1327-1363, November 2005. Available at SSRN: https://ssrn.com/abstract=856639 or http://dx.doi.org/10.1111/j.0008-4085.2005.00327.x

Kris Inwood (Contact Author)

University of Guelph - Department of Economics ( email )

50 Stone Road East
Guelph, Ontario N1G 2W1
Canada

Ian Keay

Queen's University - Department of Economics ( email )

99 University Avenue
Kingston K7L 3N6, Ontario
Canada

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