Bigger establishments in thicker markets: 
can we explain early productivity differentials between Canada and the United States?

Abstract

We use establishment-level data describing manufacturers located in 128 border and near-border counties in Michigan, New York, Ohio, Pennsylvania, and Ontario to calculate Canadian relative to U.S. total factor productivity ratios for 25 industries. The data have been compiled from the manuscripts for the 1870 U.S. and 1871 Canadian census of manufacturing. Our results illustrate that the average U.S. establishment was approximately 7% more efficient than its Canadian counterpart in 1870/71. When we control for establishment size and market density the U.S. productivity advantage shrinks to slightly less than 3%.De plus gros e´tablissements dans des marche´s plus denses : peut-on expliquer les diffe´r-entiels de productivite´entre le Canada et les Etats-Unis au sie`cle dernier? On utilise les donne´es au niveau de l'e´tablissement de´crivant des installations manufacturie`res localise´es dans 128 comte´s a`la frontie`re ou pre`s de la frontie`re dans les e´tats du Michigan, de New York, de l'Ohio, de la Pennsylvanie et dans la province de l'Ontario pour calculer la productivite´totale relative des facteurs de production dans 25 industries. Les donne´es ont e´te´extraites des manuscrits des recensements des manufactures des Etats-Unis (1870) et du Canada (1871). Les re´sultats indiquent que l'e´tablissement ame´ricain moyen e´tait a`peu pre`s 7% plus productif que sa contrepartie au Canada. Quand on normalise pour tenir

The devil is in the details: assessing early industrial performance across international borders using late nineteenth century North American manufacturers as a case study

“…Of course, the desire to produce tabulations of individual industries almost inevitably drove Canadian officials to divide the information returned by multi-process firms, for the same reasons as in the United States. 13 The 1891 classification system was the most elaborate used in Canada until the 1920s. 14 For a detailed discussion of the need to isolate TFP comparisons from differences in the composition of national aggregates see Inwood and Keay (2005 Almost all of the Ontario industrial returns have survived, but there has been considerable loss of industrial schedules for the border states. Our sample includes establishments that were located in the 38 border and near-border US counties in the lower Great Lakes region whose industrial returns have survived intact.…”

“…Unfortunately, we cannot determine if this was done consistently. 20 For example see Sokoloff (1984), pp 363, Tchakerian (1994), Inwood and Keay (2005) or Atack et al (2005). horsepower, and 4 of the 25 Canadian industries had no establishments that reported positive values for horsepower. It is apparent that for many establishments included in the 1870/1871 manuscripts there is very little horsepower reported, despite that fact that virtually all report some value for fixed capital.…”

“…For Canadian examples seeBaldwin and Gorecki (1986),Baldwin and Green (1987, unpublished manuscript),Lempriere and Rao (1992),Denny et al (1992),Inwood and Sullivan (1993),Keay (2000), orInwood and Keay (2005). For European examples seeBroadberry (1994Broadberry ( , 1995, van Ark (1992), orCrafts (1989).…”

Labour Productivity of Unincorporated Sole Proprietorships and Partnerships: Impact on the Canada-United States Productivity Gap

“…Baldwin and Gorecki (1986) and Leung et al (2008) attribute about half of the difference between Canadian and U.S. manufacturing productivity to differences in size of plants. Inwood and Keay (2005) examine a longer period and find that plant size also contributes about half of the difference. 3.…”

“…This paper contributes to our understanding of the importance of the first explanation─differences in size of markets. This theme has been pursued by a number of researchers (Baldwin and Gorecki 1986;Inwood and Keay 2005;Leung, Meh, and Terajima 2008). 2 Examination of this issue is usually approached by developing estimates of improvements in labour productivity that arise from scale economies and then by correcting for the impact of differences in firm or plant size in Canada and the United States on estimates of the relative levels of labour productivity.…”