The Trend to Smaller Producers in Manufacturing : A Canada/U.S. Comparison

This paper examines the trend in the importance of small producers in the Canadian and U.S. manufacturing sectors from the early 1970s to the late 1990s. It finds similar trends in both countries. Small plants increased their share of employment up to the 1990s but their share remained stable in the 1990s. Small plants increased their share of output up to the 1990s but then saw their share of output decline. Over the entire time period, their share of output increased less than their share of employment and, therefore, their relative labour productivity has fallen. The similarity in the trends in the two countries suggests that causes of this phenomenon should be sought in similarities such as the technological environment rather than in country specific factors like unionization or trade intensities