Firm Size and Productivity
Danny Leung (),
Cesaire Meh () and
Yaz Terajima ()
Staff Working Papers from Bank of Canada
This paper examines the relationship between firm size and productivity. In contrast to previous studies, this paper offers evidence of the relationship not only from manufacturing firms, but from non-manufacturing firms as well. Furthermore, the aggregate importance of the firm size-productivity relationship is gauged by calculating to what extent shifts in the distribution of employment over firm size categories has affected Canadian aggregate productivity, and whether differences in the employment distribution over firm size categories between Canada and the United States can account for the Canada-U.S. labour productivity gap. The importance of large and small firms to changes in productivity is also examined. A positive relationship between firm size and both labour productivity and TFP is found in both the manufacturing and non-manufacturing sectors. Given this relationship, the difference in the employment distribution over firm sizes between Canada and the United States can account for half of the Canada-U.S. labour productivity gap in manufacturing.
Keywords: Productivity (search for similar items in EconPapers)
JEL-codes: L11 L25 O47 (search for similar items in EconPapers)
Pages: 46 pages
New Economics Papers: this item is included in nep-eff and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:08-45
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