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Age-productivity profiles of entrants and exits: evidence from Canadian manufacturing

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  • Liu, Huju
  • Tang, Jianmin

Abstract

Using the Longitudinal Annual Survey of Manufacturers for Canada, this paper aims to better understand the productivity dynamics of entrants and exits as well as the factors associated with their productivity performance. It shows that entrants and exits are lower in labour productivity relative to continuing plants partly because they are smaller in size, less capital intensive, and less associated with exporting, being foreign-controlled and belonging to multi-plant firm structure. It also finds that after controlling for those factors, surviving entrants are less productive when they enter and that they improve their productivity over time to become as productive as continuing plants by around year five after entry. Exits, on the other hand, are found to be less productive than continuing plants after controlling for those factors, and the gap becomes larger as they get closer to exit.

Suggested Citation

  • Liu, Huju & Tang, Jianmin, 2017. "Age-productivity profiles of entrants and exits: evidence from Canadian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 40(C), pages 26-36.
    • Handle: RePEc:eee:streco:v:40:y:2017:i:c:p:26-36
    DOI: 10.1016/j.strueco.2016.11.003
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    Cited by:

    1. Jianmin Tang & Weimin Wang, 2023. "Capacity Utilization and Production Function Estimation: Implications for Productivity Analysis," International Productivity Monitor, Centre for the Study of Living Standards, vol. 45, pages 178-199, Fall.
    2. Hejazi, Walid & Tang, Jianmin & Wang, Weimin, 2023. "Absorptive capacity, learning and profiting from outward FDI: Evidence from Canadian firms," Journal of World Business, Elsevier, vol. 58(3).
    3. Walid Hejazi & Jianmin Tang & Weimin Wang, 2021. "Selection, learning, and productivity at the firm level: Evidence from Canadian outward FDI," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(2), pages 306-320, March.
    4. Pierre-Alain Pionnier & Belén Zinni & Kéa Baret, 2023. "Measuring Capital and Multifactor Productivity: The Role of Asset Depreciation and Initial Capital Stock Estimates," International Productivity Monitor, Centre for the Study of Living Standards, vol. 45, pages 155-177, Fall.
    5. Tang, Jianmin & Wang, Weimin, 2020. "Technological frontier, technical efficiency and the post-2000 productivity slowdown in Canada," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 12-25.
    6. Walid Hejazi & Jianmin Tang & Weimin Wang, 0. "Selection, learning, and productivity at the firm level: Evidence from Canadian outward FDI," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-15.

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    More about this item

    Keywords

    Entrants; Exits; Productivity dynamics;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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