| Affiliation: | (1) Micro Economic Analysis Division, Statistics Canada, R. H. Coats Building, 18-H, K1A 0T6 Ottawa, Ontario;(2) Industry Canada, 18-H Ottawa, Ontario, K1A 0T6;(3) Department of Finance Canada, 18-H Ottawa, Ontario, K1A 0T6 |
| Abstract: | Using panel data on 81 Canadian manufacturing industries over the 1983–1996 period, the authors show that the estimated impact of recent tariff cuts was a positive and significant increase in the exit rate of firms. Supplementing this finding with recent research showing, that exiting firms tend to be less productive than those that survive, this provides support for recent trade models asserting that increased exposure to international trade induces the exit of least efficient firms, thereby contributing to productivity growth. JEL no. F1, L6 |
