OTTAWA, Ont. — The trend to smaller producers in manufacturing: A Canada/U.S. comparison, was recently released by Statistics Canada.
The study found small Canadian plants increased their share of output, during the 1970s and ’80s, but did so only slightly. And during the 1990s, their share of output began to fall. Together, the evidence on both employment and output suggests that the era of increasing importance of small producers, at least in manufacturing, came to an end in the early 1990s.
The study examined whether there is a difference between the importance of small plants in the manufacturing sectors of Canada and the U.S. It found Canada has a larger proportion of employment in small plants than does the U.S. But the trend to a higher employment share in smaller plants over the last quarter century has been similar in the two countries.
The study also examined whether there has been a similar trend in the declining relative productivity of smaller manufacturing plants in the two countries.
According to the paper, both countries have experienced a decline in the productivity of small plants relative to large plants and the magnitude of the decline is about the same in each.
The similarities in this area suggest that it is commonalities in the technological environment that are driving the changing relative productivity of small and large plants, rather than country-specific factors, such as unionization or differences in trade intensities.
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