Profitability of Canadian- Versus U.S.-controlled Enterprises

Paul Warren

Economic Analysis (EA) Research Paper Series from Statistics Canada, Analytical Studies Branch

Abstract: This paper examines the course of profitability of large Canadian-resident enterprises over the period 1990-98. It focuses first on the differences in the profitability of Canadian-controlled and U.S.-controlled enterprises and asks whether there are differences in trends in profitability by country of ownership over the business cycle experienced in the 1990s. It uses micro-economic data on the profitability of large non-integrated firms to investigate the role played by market share in determining profitability in each group and the extent to which profits that deviate from the mean are forced quickly or slowly back to their long-run equilibrium values. Both facets of profit behaviour are related to the nature of competition in the markets served by firms. Finally, it examines the role played by changes in the Canada-U.S. exchange rate in determining profitability in order to understand the extent to which each group uses these changes to adjust their foreign prices and thus to affect reported Canadian profits.

Keywords: Business performance and ownership; Financial statements and performance; Business ownership (search for similar items in EconPapers)
Date: 2005-03-03
New Economics Papers: this item is included in nep-bec
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Persistent link: https://EconPapers.repec.org/RePEc:stc:stcp5e:2005030e

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