Exports, Margins and Productivity Growth: With an Application to the Canadian Softwood Lumber Industry

Jeffrey Bernstein

The Review of Economics and Statistics, 1994, vol. 76, issue 2, 291-301

Abstract: The purpose of this paper is to evaluate the allocative and dynamic efficiency of the Canadian softwood lumber industry by testing for the existence of price-cost margins and decomposing rates of total factor productivity (TFP) growth. A dynamic model of multiple output production and investment is developed in which output is sold domestically and exported. Price-cost margins are parametrized and estimated. The empirical results show that prices are equated to short-run marginal costs in domestic and export markets. TFP growth is decomposed into four elements; technological change, returns to sale, price-cost margins and capital adjustment. The empirical results show that, for the Canadian softwood lumber industry, TFP growth averaged 3 percent per year and the major contributing element was the rate of technological change. Copyright 1994 by MIT Press.

Date: 1994
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Working Paper: Exports, Margins and Productivity Growth: with an Application to the Canadian Softwood Lumber Industry (1992)
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