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Technical change and productivity growth in the Alberta logging industry

Shuo Wang and Henry An

Forest Policy and Economics, 2019, vol. 102, issue C, 130-137

Abstract: The logging industry in Alberta, Canada is subject to some of the most stringent forest management regulations in North America. Though studies have criticized that forest management regulations in Alberta discourage innovation and hinder competi-tiveness, there is no empirical evidence on how the rate of technical change and productivity growth have evolved over time. A more detailed investigation of the production structure would illustrate the extent to which stringent forest regulatory policies in Alberta have slowed down technical change and negatively affected productivity in the sector. The purpose of this study is to investigate the production structure of the Alberta logging industry; specifically, we examine the nature of factor substitution, and estimate the rate of technical change and total factor productivity growth. Our key finding is that both the rate of technical change and total factor productivity growth are negative in most years in our sample. We also find low elasticities of substitution between inputs and that technical change has been material-neutral. The results of our study provide some evidence that Albertas regulations have reduced the incentive for the logging industry to improve its overall productivity.

Keywords: Productivity growth; Technical change; Alberta; Logging industry (search for similar items in EconPapers)
JEL-codes: D24 Q23 Q28 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:forpol:v:102:y:2019:i:c:p:130-137