Canadian Journal of Economics-Revue Canadienne D Economique最新文献

We examine whether deep regional trade agreements facilitate cross-border licensing. A micro-founded gravity equation for each supply mode is derived from a model in which heterogeneous firms choose to supply their goods to foreign markets through export, foreign direct investment or licensing. We present several comparative statics results regarding the effects of changes in the fixed costs of serving the destination country, the freeness of trade, and the strength of intellectual property rights protection on bilateral flows of licensing revenues. We then empirically test our theoretical predictions using data on the cross-border flows of royalties and licence fees for 49 countries in the period 1995–2012. In addition to variables that capture the impact of shallow and deep regional trade agreements, we construct dummy variables that represent subcategories of IP rights-related provisions. Consistent with our theoretical predictions, we find that improved access to the destination market through a deep regional trade agreement and stronger IP rights protection through a regional trade agreement with legally enforceable IP rights and technology-related provisions increase bilateral flows of licensing revenues. Among IP rights-related provisions, the accession to or ratification of existing international IP agreements and the protection of trademarks, patents, or industrial designs are important for facilitating cross-border licensing.

The right tail of the firm size distribution has a heavy tail. The origin of this phenomenon, especially the specific characteristics of firms driving this pattern, remain a subject of extensive debate. Previous work has shown that plant size distribution has thinner tails than firm size distribution, indicating the role of multi-plant firms. However, we do not know whether this phenomenon is simply a mechanical effect arising from aggregation across multiple plants or whether the plants of multi-plant firms are different from those of single-plant firms. Using novel data with plant-to-firm mapping, we document that plants of multi-plant firms are more heavy-tailed than single-plant firms, indicating the dominance of the selection effect at the intensive margin. Extensive margin via aggregation of sales at the firm level plays a less crucial role than the selection effect. Importantly, single-plant exporters have a thinner tail than multi-plant non-exporters, suggesting a more dominant role of multi-plant identity than export identity in explaining heavy tails.

We document five novel facts about the dynamism of Chinese manufacturing firms between 2003 and 2018. We show that: (i) the revenue and capital shares of young firms have declined, (ii) life-cycle growth of firm revenues and assets has declined, (iii) life-cycle growth of process efficiency / product quality and investment in intangibles has declined (iv) younger firms have higher capital productivity than older firms, with the gap increasing over time, and (v) the dispersion of capital growth and the responsiveness of capital growth to capital productivity have both declined. Using a simple model, we estimate that the lower life-cycle productivity growth of young firms reduces manufacturing productivity growth by 0.8 percentage points annually, and worsening allocative efficiency of capital between young and old firms reduced manufacturing total factor productivity by 1.25% between the early 2000s and late 2010s. We find that business dynamism is weaker in provinces where state-owned enterprises account for a larger share of the capital stock.

This paper examines the growth maximization mix for intellectual property rights (IPR) in an economy in which incumbents and outside inventors endogenously choose how to develop inventions and commercialization strategies, both of which determine the innovation rate. Outside inventors can choose to commercialize their inventions by (i) launching a new product or (ii) selling to incumbents. I find that if inventors all sell on the technology market, then protecting inventors' patents from imitation by firms raises aggregate innovation. If, instead, all inventors enter the product market, the IPR policy that regulates the ability of incumbents' patents to block the entry of improved products faces a trade-off between innovation from existing firms and inventors, which leads to a single-peaked relationship between economic growth and the blocking strength. When both commercialization strategies are chosen, a balanced IPR policy can raise aggregate innovation by encouraging inventors to choose the more efficient commercialization method.

This paper integrates the migration decisions of married couples into a multi-sector spatial model, investigating their impact on structural transformation, productivity and gender wage gap. Focusing on China, a country characterized by a higher share of agricultural employment and a lower share in services compared with countries with similar income, we uncover a significant gender gap in migration costs among rural married couples. Furthermore, while migration costs have decreased for all demographic groups from 2000 to 2010, the decline was least pronounced for married couples when both partners left agriculture. We find that reducing migration costs for married couples who migrate together would lead to a decline in agricultural employment, a rise in service sector employment, an increase in aggregate productivity and a narrowing of the gender wage gap. Eliminating the gender differences in migration costs would also increase service sector employment and reduce the gender wage gap.

We study the aggregate productivity effects of firm-level financial frictions. Credit constraints affect not only production decisions but also household-level schooling decisions. In turn, entrepreneurial schooling decisions impact firm-level productivities, whose cross-sectional distribution becomes endogenous. In anticipation of future constraints, entrepreneurs underinvest in schooling early in life. Frictions lower aggregate productivity because talent is misallocated across occupations and capital is misallocated across firms. Firm-level productivities are also lower due to schooling distortions. These effects combined account for between 36% and 68% of the US–India aggregate productivity difference. Schooling distortions are the major source of aggregate productivity differences.

In this paper, we use a unified framework of competing exporters and competing importers models where political biases in both exporting and import-competing sectors influence governments' decisions in trade agreement formation and external tariff setting. Using an endogenous trade agreement formation model, we show that the relative strength of political biases in import-competing and exporting sectors are pivotal in determining the free-riding incentives, exclusion incentives and whether the ability to form free trade areas acts as building or stumbling blocks towards multilateral free trade. When the political biases toward exporting and import-competing sectors are sufficiently weak, the ability to form free trade agreements acts as strong building blocks toward free trade. However, when the political bias towards exporting sectors is at the intermediate range and political bias towards import-competing sectors is sufficiently strong, the ability to form free trade agreements acts as strong stumbling blocks.

We analyze the evolution of the plant size distribution, static allocative efficiency and business dynamism of the Korean manufacturing sector during its growth miracle (1967–2000) and the subsequent slowdown since 2000. The average plant size has an inverse-U pattern over time, with a peak in the late 1970s. The measure of static misallocation decreases modestly until 1983 but increases substantially afterwards. These results are at odds with what one may extrapolate from the existing cross-country evidence on the positive relationship between plant size and economic development or the negative one between static misallocation and development. We also find that the growth rate of manufacturing productivity is not systematically correlated with either the level or the rate of change of the average plant size or static misallocation. On the other hand, business dynamism, measured by either churning or responsiveness to shocks, diminished significantly since 2000, coinciding with the decline in the growth rate of manufacturing productivity. Our findings call for more systematic research on how economic performance correlates with establishment/firm size distribution and with static and dynamic allocative efficiency.

Physicians are typically paid for services completed. Yet, they provide different types of services with different prices, introducing a multitasking element to their labour-supply decisions. We show that optimal behaviour generates a maximum earnings function in which earnings depend on prices and total hours worked. Estimation by limited-information methods identifies a lower bound to the own-price substitution effect of a price change. Full-information methods identify the full response to incentives, including income effects. We illustrate these methods on a sample of specialist physicians working in Québec, Canada. Our results suggest that the own-price substitution effects of a price change are both economically and statistically significant. Income effects are present but overridden when prices increase for individual services. In contrast, in the presence of broad-based fee increases, the income effect dominates the substitution effect, which leads physicians to reduce their supply of services.