The Canada-U.S. Productivity Puzzle: Regional Evidence of the Pulp and Paper Industry, 1971-2005

Jean-Thomas Bernard () and Jakir Hussain ()
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Jakir Hussain: PhD Candidate, Department of Economics, University of Ottawa

No 1509E, Working Papers from University of Ottawa, Department of Economics

Abstract: We analyze the total factor productivity (TFP) of the pulp and paper industry in three Canadian provinces (British Columbia, Ontario, and Quebec) and in three U.S. states that are contiguously located south of the border (Washington, Illinois, and Maine) over the period of 1971 to 2005. We find that the industry in the three Canadian provinces had much higher TFP growth rates in the era following the Free Trade Agreement (FTA), signed in 1988. In terms of productivity trend, this relative TFP surge has allowed the industry in the three Canadian provinces to move ahead of Illinois and Washington and closer to Maine which is the U.S. leader in the sample. Our results in this particular case do not support the commonly accepted view that Canada has a productivity problem relative to the U.S.

Keywords: Total factor productivity; income convergence; pulp and paper industry (search for similar items in EconPapers)
JEL-codes: D24 L73 N62 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2015
New Economics Papers: this item is included in nep-eff and nep-int
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