Globally Trading Firms in Canada

Productivity and Global Value Chains

Authors

  • Ram C. Acharya Innovation, Science and Economic Development Canada

Abstract

Using firm-level data in Canada from 2002 to 2008, I compare the economic performance of three types of firms: those that both export and import (called globally trading firms—GTFs), exporters-only, and importers-only. The results show that GTFs are more productive, larger, more capital intensive, pay higher wages, trade more goods, and trade with more countries than both types of one-way traders. These premia for GTFs were found even before they turned into GTFs (self-selection). Moreover, even after turning into GTFs, the productivity growth of a subset of them was faster than that of one-way traders. The higher the involvement in global value chains (GVCs), the higher was the performance of the “learning-by-turning GTFs”. The GTFs with higher productivity growth were the ones that imported from multiple countries, not those that imported only from China. By another measure, they were both-in-both GTFs—those that traded both final and intermediate goods, and in both directions (exports and imports). Even though they employed only 10% of Canada’s business sector workforce, they contributed 60% of its labour productivity growth.

Published

2021-02-26

How to Cite

Acharya, R. C. (2021). Globally Trading Firms in Canada: Productivity and Global Value Chains. Journal of Comparative International Management, 22(1), 1–23. Retrieved from https://journals.lib.unb.ca/index.php/JCIM/article/view/31653

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Articles