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Bigger establishments in thicker markets: can we explain early productivity differentials between Canada and the United States?

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  • Kris Inwood
  • Ian Keay

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%. De plus gros établissements dans des marchés plus denses : peut‐on expliquer les différentiels de productivité entre le Canada et les Etats‐Unis au siècle dernier? On utilise les données au niveau de l’établissement décrivant des installations manufacturières localisées dans 128 comtés à la frontière ou près de la frontière dans les états du Michigan, de New York, de l’Ohio, de la Pennsylvanie et dans la province de l’Ontario pour calculer la productivité totale relative des facteurs de production dans 25 industries. Les données ont été extraites des manuscrits des recensements des manufactures des Etats‐Unis (1870) et du Canada (1871). Les résultats indiquent que l’établissement américain moyen était à peu près 7% plus productif que sa contrepartie au Canada. Quand on normalise pour tenir compte de la taille de l’établissement et de la densité du marché, l’avantage comparatif des Américains tombent à un peu moins de 3%.

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  • Kris Inwood & Ian Keay, 2005. "Bigger establishments in thicker markets: can we explain early productivity differentials between Canada and the United States?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(4), pages 1327-1363, November.
    • Handle: RePEc:wly:canjec:v:38:y:2005:i:4:p:1327-1363
    DOI: 10.1111/j.0008-4085.2005.00327.x
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    3. Jaworski, Taylor & Keay, Ian, 2022. "Globalization and the spread of industrialization in Canada, 1871–1891," Explorations in Economic History, Elsevier, vol. 86(C).
    4. Geloso, Vincent & Kufenko, Vadim & Arsenault-Morin, Alex P., 2023. "The lesser shades of labor coercion: The impact of seigneurial tenure in nineteenth-century Quebec," Journal of Development Economics, Elsevier, vol. 163(C).

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