Essays on Canada-US Productivity in Manufacturing




Li, Jiang

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Canada and the US are highly integrated economies and yet persistent productivity gaps exist between them. This raises the question whether there is a relationship in productivity between Canada and the US, and if so, what industry-specific characteristics are important. This dissertation focuses on the manufacturing sector and its component three-digit industries. The first chapter investigates the interdependence of labour productivity (LP) between the two countries. It finds no evidence of long-run convergence of US and Canadian LP. There is, however, some evidence of short-run dependence within industries. Regarding industry characteristics, only industry-specific export intensity is found to be an important channel for the long-run productivity transmission. The second chapter develops measures of total factor productivity (TFP) that are comparable across Canada and the US. The third chapter investigates the interdependence of TFP between the countries. As with LP, there is no evidence of long-run convergence. In both the short and long run, the dependence of Canadian manufacturing industries upon their US counterparts is limited and non-uniform. The fourth chapter examines industry-specific characteristics. Export, import and foreign direct investment (FDI) intensities are found to be important channels in the short run for technology diffusion from the US. Surprisingly, a higher research and development intensity reduces short-run technology diffusion. In the long run, export and FDI intensities are shown to contribute to technology diffusion.



industries, manufacturing, labour, labor