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International Competition and Industrial Performance: Allocative Efficiency, Productive Efficiency, and Turbulence

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  • Caves, Richard
  • Baldwin, John R.

Abstract

Trade exerts generally favourable effects on the performance of domestic manufacturing industries in the dimensions of allocative and productive efficiency. This paper reviews 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 American Free Trade Area) also have significant effects. The normative significant of turbulence is mixed but has important positive components.

Suggested Citation

  • 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.
    • Handle: RePEc:stc:stcp3e:1997108e
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    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M1997108
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    References listed on IDEAS

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    Cited by:

    1. Xiaolan Fu, 2004. "Exports, Technical Progress and Productivity Growth in Chinese Manufacturing Industries," Working Papers wp278, Centre for Business Research, University of Cambridge.
    2. Andrew Burke & Holger Görg & Aoife Hanley, 2008. "The impact of foreign direct investment on new firm survival in the UK: evidence for static versus dynamic industries," Small Business Economics, Springer, vol. 31(4), pages 395-407, December.
    3. repec:lan:wpaper:3764 is not listed on IDEAS
    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.
    5. Michele Cincera, 2004. "Impact of market entry and exit on EU productivity and growth performance," ULB Institutional Repository 2013/921, ULB -- Universite Libre de Bruxelles.
    6. repec:lan:wpaper:3655 is not listed on IDEAS
    7. 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.
    8. 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.
    9. Xiaolan Fu & V. N. Balasubramanyam, 2003. "Township and Village Enterprises in China," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 27-46.
    10. Gu, Wulong Sawchuk, Gary, 2006. "How Are Canadian Regions Adjusting to a Larger and More Integrated North American Market?," Economic Analysis (EA) Research Paper Series 2006039e, Statistics Canada, Analytical Studies Branch.
    11. repec:lan:wpaper:4049 is not listed on IDEAS
    12. David Laidler, 1999. "Canada's Exchange Rate Options," Canadian Public Policy, University of Toronto Press, vol. 25(3), pages 324-332, September.
    13. Fu, Xiaolan, 2004. "Limited linkages from growth engines and regional disparities in China," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 148-164, March.
    14. Nurhani Aba Ibrahim, 2011. "Causality Between Exports And Productivity In The Malaysian Economy," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 56(03), pages 377-395.

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