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Impact of the Adoption of Advanced Information and Communication Technologies on Firm Performance in the Canadian Manufacturing Sector

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  • Sabourin, David
  • Baldwin, John R.

Abstract

This paper investigates the evolution of the industrial structure in the Canadian manufacturing sector and its relationship to technological change by examining the take-up of advanced technologies and how it is related to the stochastic growth process in the plant population. Its framework is grounded in the view that growth is a stochastic process that involves learning. Experimentation with new technologies rewards some firms with superior growth and profitability. Examining how growth is associated with the choice of different technology strategies indicates which of these is being rewarded. The evolution of this process is studied by examining the relationship between the uptake of advanced technologies and the performance of plants in the manufacturing sector. This is done by using cross-sectional data on advanced technology use and by combining it with longitudinal panel data on plant performance. In particular, the paper examines the relationship between the use of information and communications technology (ICT) and the growth in a plant's market share and its relative productivity. The study finds that a considerable amount of market share is transferred from declining firms to growing firms over a decade. At the same time, the growers increase their productivity relative to the losers. Those technology users that were using communications technologies or that combined technologies from different classes increased their relative productivity the most. In turn, gains in relative productivity were accompanied by gains in market share. Other factors that were associated with gains in market share were the presence of R&D facilities and other innovative activities.

Suggested Citation

  • Sabourin, David & Baldwin, John R., 2001. "Impact of the Adoption of Advanced Information and Communication Technologies on Firm Performance in the Canadian Manufacturing Sector," Analytical Studies Branch Research Paper Series 2001174e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:2001174e
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Sabourin, David Baldwin, John R. Smith, David, 2003. "Impact of Advanced Technology Use on Firm Performance in the Canadian Food Processing Sector," Economic Analysis (EA) Research Paper Series 2003012e, Statistics Canada, Analytical Studies Branch.
    2. Beckstead, Desmond Gellatly, Guy, 2004. "Are Knowledge Workers Found Only in High-technology Industries?," The Canadian Economy in Transition 2004005e, Statistics Canada, Economic Analysis Division.
    3. Baldwin, John R. Gellatly, Guy, 2006. "Innovation Capabilities: The Knowledge Capital Behind the Survival and Growth of Firms," The Canadian Economy in Transition 2006013e, Statistics Canada, Economic Analysis Division.
    4. Ayed Mouelhi, Rim Ben, 2009. "Impact of the adoption of information and communication technologies on firm efficiency in the Tunisian manufacturing sector," Economic Modelling, Elsevier, vol. 26(5), pages 961-967, September.
    5. Maria del Rosario Demuner Flores & Osvaldo Urbano Becerril Torres & Rosa Maria Nava Rogel, 2014. "INFORMATION AND COMMUNICATION TECHNOLOGIES IN SMEs MEXICAN COMPANIES TECNOLOGIAS DE INFORMACION Y COMUNICACION EN PYMES MEXICANAS," Revista Global de Negocios, The Institute for Business and Finance Research, vol. 2(3), pages 15-27.
    6. Baldwin, John R. Gellatly, Guy, 2007. "Innovation Capabilities: Technology Use, Productivity Growth and Business Performance: Evidence from Canadian Technology Surveys," The Canadian Economy in Transition 2007016e, Statistics Canada, Economic Analysis Division.
    7. Dietrich Domanski, 2003. "Idiosyncratic Risk in the 1990s: Is It an IT Story?," WIDER Working Paper Series DP2003-07, World Institute for Development Economic Research (UNU-WIDER).
    8. Walid Hejazi & Daniel Trefler, 2019. "Implications of Canada’s restrictive FDI policies on employment and productivity," Journal of International Business Policy, Palgrave Macmillan, vol. 2(2), pages 142-166, June.
    9. Sang Nguyen & B.K. Atrostic, 2005. "Computer Investment, Computer Networks and Productivity," Working Papers 05-01, Center for Economic Studies, U.S. Census Bureau.
    10. Vinodrai, Tara, 2001. "A Tale of Three Cities: The Dynamics of Manufacturing in Toronto, Montreal, and Vancouver, 1976-1997," Analytical Studies Branch Research Paper Series 2001177e, Statistics Canada, Analytical Studies Branch.
    11. Berné, Carmen & García-González, Margarita & García-Uceda, María E. & Múgica, José M., 2015. "The effect of ICT on relationship enhancement and performance in tourism channels," Tourism Management, Elsevier, vol. 48(C), pages 188-198.
    12. Bernard Hategekimana & Michael Trant, 2002. "Adoption and Diffusion of New Technology in Agriculture: Genetically Modified Corn and Soybeans," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 50(4), pages 357-371, December.
    13. Centre for the Study of Living Standards, 2012. "The Impact of Information and Communication Technology on the Productivity of the Canadian Transportation System: A Macroeconomic Approach for the Air and Rail Sectors," CSLS Research Reports 2012-07, Centre for the Study of Living Standards.
    14. Boothby, Daniel & Dufour, Anik & Tang, Jianmin, 2010. "Technology adoption, training and productivity performance," Research Policy, Elsevier, vol. 39(5), pages 650-661, June.
    15. Bernard Hategekimana & Michael Trant, 2002. "Adoption et diffusion de nouvelles technologies agricoles : maïs et soya génétiquement modifies," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 50(4), pages 373-389, December.
    16. Sabourin, David & Baldwin, John R., 2002. "Enhancing Food Safety and Productivity: Technology Use in the Canadian Food Processing Industry," Analytical Studies Branch Research Paper Series 2002168e, Statistics Canada, Analytical Studies Branch.
    17. John R Baldwin & Ron S Jarmin & Jianmin Tang, 2002. "The Trend to Smaller Producers in Manufacturing in Canada and the U.S," Working Papers 02-06, Center for Economic Studies, U.S. Census Bureau.
    18. 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.
    19. Harchaoui, Tarek Tarkhani, Faouzi, 2004. "Whatever Happened to Canada-United States Economic Growth and Productivity Performance in the Information Age?," Economic Analysis (EA) Research Paper Series 2004025e, Statistics Canada, Analytical Studies Branch.
    20. Brown, W. Mark & Vinodrai, Tara & Baldwin, John R., 2001. "Dynamics of the Canadian Manufacturing Sector in Metropolitan and Rural Regions," Analytical Studies Branch Research Paper Series 2001169e, Statistics Canada, Analytical Studies Branch.
    21. repec:idb:brikps:71298 is not listed on IDEAS

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