IDEAS home Printed from https://ideas.repec.org/p/fth/harver/1809.html
   My bibliography  Save this paper

International Competition and Industrial Performance: Allocative Efficiency, and Turbulence

Author

Listed:
  • John R. Baldwin
  • Richard E. Caves

Abstract

Trade experts generally favorable effects on the performance of domestic manufacturing industries in the dimensions of allocative and productive efficiency. We review theory and recent evidence on these linkages and also explore a third effect - on the turbulence of competitive conditions and the turnover of business units. Calculations using primary census records for Canada over 1973-1992 indicate, with time and industry effect, controlled, market-share turnover, entry, exit and mergers all increase with trade exposure. The effect is tied to market structures of differentiated products but broad international disturbances (North America Free Trade Area) also have significant effects. The normative significant of turbulence is mixed by has important positive components.

Suggested Citation

  • John R. Baldwin & Richard E. Caves, 1997. "International Competition and Industrial Performance: Allocative Efficiency, and Turbulence," Harvard Institute of Economic Research Working Papers 1809, Harvard - Institute of Economic Research.
    • Handle: RePEc:fth:harver:1809
    as

    Download full text from publisher

    File URL: ftp://ftp.repec.org/RePEc/fth/harver/997/1809.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, April.
    2. Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February.
    3. MacDonald, James M, 1994. "Does Import Competition Force Efficient Production?," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 721-727, November.
    4. Martin Neil Baily & Hans Gersbach, 1995. "Efficiency in Manufacturing and the Need for Global Competition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995 Micr), pages 307-358.
    5. Yamawaki, Hideki, 1986. "Exports, Foreign Market Structure, and Profitability in Japanese and U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 618-627, November.
    6. Katics, Michelle M & Petersen, Bruce C, 1994. "The Effect of Rising Import Competition on Market Power: A Panel Data Study of U.S. Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 277-286, September.
    7. Yamawaki, Hideki, 1991. "Exports and Foreign Distributional Activities: Evidence on Japanese Firms in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 294-300, May.
    8. Caves, Richard E., 1985. "International trade and industrial organization: Problems, solved and unsolved," European Economic Review, Elsevier, vol. 28(3), pages 377-395, August.
    9. Richard E. Caves & Matthew B. Krepps, 1993. "Fat: The Displacement of Nonproduction Workers from U.S. Manufacturing Industries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2 Microec), pages 227-288.
    10. Michael Spence, 1978. "Tacit Co-ordination and Imperfect Information," Canadian Journal of Economics, Canadian Economics Association, vol. 11(3), pages 490-505, August.
    11. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-746, August.
    12. Caves, Richard E & Porter, Michael E, 1978. "Market Structure, Oligopoly, and Stability of Market Shares," Journal of Industrial Economics, Wiley Blackwell, vol. 26(4), pages 289-313, June.
    13. Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1998. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521633574.
    14. Robert H. McGuckin & Sang V. Nguyen, 1995. "On Productivity and Plant Ownership Change: New Evidence from the Longitudinal Research Database," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 257-276, Summer.
    15. Baldwin, John R., 1996. "Productivity Growth, Plant Turnover and Restructuring in the Canadian Manufacturing Sector," Analytical Studies Branch Research Paper Series 1995087e, Statistics Canada, Analytical Studies Branch.
    16. Richard E. Caves, 1992. "Industrial Efficiency in Six Nations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031930, April.
    17. Michael Salinger, 1990. "The Concentration-Margins Relationship Reconsidered," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1990 Micr), pages 287-335.
    18. Pugel, Thomas A, 1980. "Foreign Trade and US Market Performance," Journal of Industrial Economics, Wiley Blackwell, vol. 29(2), pages 119-129, December.
    19. Yamawaki, Hideki & Audretsch, David B, 1988. "Import Share under International Oligopoly with Differentiated Products: Japanese Imports in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 569-579, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Robin Leichenko & Julie Silva, 2004. "International Trade, Employment and Earnings: Evidence from US Rural Counties," Regional Studies, Taylor & Francis Journals, vol. 38(4), pages 355-374.
    2. David Laidler, 1999. "Canada's Exchange Rate Options," Canadian Public Policy, University of Toronto Press, vol. 25(3), pages 324-332, September.
    3. Gu, Wulong Sawchuk, Gary, 2006. "Comment les régions du Canada s'adaptent-elles à un marché nord-américain plus grand et plus intégré?," Série de documents de recherche sur l'analyse économique (AE) 2006039f, Statistics Canada, Direction des études analytiques.
    4. Xiaolan Fu, 2005. "Exports, technical progress and productivity growth in a transition economy: a non-parametric approach for China," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 725-739.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Caves, Richard & Baldwin, John R., 1997. "International Competition and Industrial Performance: Allocative Efficiency, Productive Efficiency, and Turbulence," Analytical Studies Branch Research Paper Series 1997108e, Statistics Canada, Analytical Studies Branch.
    2. Caves, Richard & Baldwin, John R., 1997. "Concurrence internationale et performance industrielle : allocation optimale, production optimale et turbulence," Direction des études analytiques : documents de recherche 1997108f, Statistics Canada, Direction des études analytiques.
    3. Nickell, Stephen & Nicolitsas, Daphne & Dryden, Neil, 1997. "What makes firms perform well?," European Economic Review, Elsevier, vol. 41(3-5), pages 783-796, April.
    4. Elena Podrecca, 2013. "Riforme del mercato dei prodotti e crescita della produttivit?. Teoria ed evidenza empirica," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 0(2), pages 10-41.
    5. Thompson, Aileen, 2000. "Import Competition and Market Power: Canadian Evidence," Analytical Studies Branch Research Paper Series 2000139e, Statistics Canada, Analytical Studies Branch.
    6. Elango, B. & Pattnaik, Chinmay, 2013. "Response strategies of local firms to import competition in emerging markets," Journal of Business Research, Elsevier, vol. 66(12), pages 2460-2465.
    7. Baldwin, John R. Jarmin , Ron S. Tang, Jianmin, 2002. "L'importance accrue des producteurs plus petits dans le secteur de la fabrication : comparaison Canada-États-Unis," Série de documents de recherche sur l'analyse économique (AE) 2002003f, Statistics Canada, Direction des études analytiques.
    8. Baldwin, John R., 1999. "Un portrait des entrees et des sorties," Direction des études analytiques : documents de recherche 1999121f, Statistics Canada, Direction des études analytiques.
    9. Jose E. Galdon Sanchez & James A. Schmitz, 2003. "Competitive pressure and labor productivity: world iron ore markets in the 1980s," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 27(Spr), pages 9-23.
    10. Christian Bellak, 2004. "How Domestic and Foreign Firms Differ and Why Does it Matter?," Journal of Economic Surveys, Wiley Blackwell, vol. 18(4), pages 483-514, September.
    11. Baldwin, John R., 1999. "A Portrait of Entrants and Exits," Analytical Studies Branch Research Paper Series 1999121e, Statistics Canada, Analytical Studies Branch.
    12. Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, productivity and growth: OECD evidence [‘A model of growth through creative destruction’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 18(36), pages 9-72.
    13. Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March.
    14. Jurgen Essletzbichler & David Rigby, 2005. "Technological evolution as creative destruction of process heterogeneity: evidence from US plant-level data," Economic Systems Research, Taylor & Francis Journals, vol. 17(1), pages 25-45.
    15. Ghosal, Vivek, 2000. "Product market competition and the industry price-cost markup fluctuations:: role of energy price and monetary changes," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 415-444, April.
    16. Gaëtan Nicodème & Jacques-Bernard Sauner-Leroy, 2007. "Product Market Reforms and Productivity: A Review of the Theoretical and Empirical Literature on the Transmission Channels," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 53-72, March.
    17. P. Geroski, 1998. "An Applied Econometrician's View of Large Company Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 271-294, June.
    18. Christian Bellak, 2001. "Multinational Enterprises and Their Domestic Counterparts: Past Research, Current Issues and Future Directions," Working Papers geewp18, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    19. Baldwin, John R. Jarmin , Ron S. Tang, Jianmin, 2002. "The Trend to Smaller Producers in Manufacturing: A Canada/U.S. Comparison," Economic Analysis (EA) Research Paper Series 2002003e, Statistics Canada, Analytical Studies Branch.
    20. Richard E. Caves, 1993. "Japanese Investment in the United States: Lessons for the Economic Analysis of Foreign Investment," The World Economy, Wiley Blackwell, vol. 16(3), pages 279-300, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fth:harver:1809. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/ieharus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.