The Impact of High Tariffs and Imperfect Market Structure on Plant Scale Inefficiency in Canadian Manufacturing Industries in the 1970’s

John Baldwin and Paul Gorecki

No 1987013, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper attempts to overcome the problems that have beset other studies in this area and to extend previous analyses. It uses an extensive data for 1970 and 1979 on the 167 4-digit industries into which the Canadian manufacturing sector is divided. Thus it permits a more comprehensive analysis than previously done. By having two cross-sections separated by a decade, it also tests for stability in the determinants of sub-optimal scale. Finally, it models the effect of trade and tariffs in an manner that is more in keeping with hypothesis, attributed in the Canadian context to Eastman-Stykolt (1967), that the primary effect of trade restrictions is to be found in imperfectly structured (high concentration) markets.

Pages: 24
Date: 1987-03-01
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