Frontier Firms, Productivity Dispersion and Aggregate Productivity Growth in Canada

Wulong Gu ()

International Productivity Monitor, 2019, vol. 37, 96-119

Abstract: Labour productivity growth in the business sector in Canada fell off after 2000. This article examines how innovation, innovation diffusion across firms, and business dynamism affected the productivity slowdown. The article found that both innovation and diffusion of innovation declined in Canada after 2000, contributing to the decline in labour productivity growth in that period. However, their relative contribution to the productivity slowdown is sensitive to the methods adopted. The results from a productivity decomposition into contributions of frontier firms (defined as the top 10 per cent most productive firms in an industry) and non-frontier firms show that the slowdown in the diffusion of innovation is a main source of the productivity slowdown after 2000. In contrast, the results from a stochastic frontier analysis show that the decline in innovation is the main source of the productivity slowdown after 2000. Finally, this article found that resource reallocation declined in Canadian firms after 2000, contributing to the decline in aggregate labour productivity growth in the business sector in that period.

Keywords: Productivity; Frontier firms; Canada (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.csls.ca/ipm/37/Gu.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sls:ipmsls:v:37:y:2019:4

Ordering information: This journal article can be ordered from
http://www.csls.ca

Access Statistics for this article

International Productivity Monitor is currently edited by Andrew Sharpe, Executive Director

More articles in International Productivity Monitor from Centre for the Study of Living Standards 170 Laurier Ave. W, Suite 604, Ottawa, ON K1P 5V5. Contact information at EDIRC.
Bibliographic data for series maintained by CSLS ( this e-mail address is bad, please contact ).