Entry, exit, mergers and growth

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  • Articles and reports: 11-622-M2012022
    Geography: Canada
    Description:

    This paper examines firm entry and exit patterns in the Canadian business sector by using the Longitudinal Employment Analysis Program database developed by Statistics Canada. Our primary purpose is to present stylized facts and provide descriptive analysis of the entry and exit patterns in the Canadian economy in order to form a solid foundation for future in-depth theoretical and empirical studies of firm dynamics. In particular, this paper focuses on the relative importance of entrants and exiters in terms of both number and employment, the persistence of entry and exit patterns over time, and the correlation between industry entry and exit rates.

    Release date: 2012-01-25

  • Articles and reports: 11-626-X2012004
    Geography: Canada
    Description:

    This Economic Insights article discusses firm entry and exit patterns in the Canadian business sector and its constituent industries. The analysis is based on Statistics Canada Longitudinal Employment Analysis program datasets. The article focuses on the relative importance of entrants and exiters, calculated in terms of number of firms and employment, the persistence of entry and exit patterns over time, and the correlation between industry entry and exit rates.

    Release date: 2012-01-25

  • Articles and reports: 11F0027M2011072
    Geography: Canada
    Description:

    The nature of the competitive process that causes a reallocation of market shares within an industry contributes to aggregate productivity growth. This paper extends our understanding of industry differences in the competitive process by examining firm turnover and productivity growth in various services industries in Canada and situating them relative to retailing and manufacturing, two industries which have been the focus of these studies in the past. Seven industries in the services sector, namely wholesale trade, transportation and warehousing, air transportation, truck transportation, broadcasting and telecommunications, business services and financial services, are examined.

    Release date: 2011-08-19

  • Articles and reports: 11F0027M2010061
    Geography: Canada
    Description:

    We examine the simultaneous effects of real-exchange-rate movements and of tariff reductions on plant death in Canadian manufacturing industries between 1979 and 1996. We find that both currency appreciation and tariff cuts increase the probability of plant death, but that tariff reductions have a much greater effect. Consistent with the implications of recent international-trade models involving heterogeneous firms, we further find that the effect of exchange-rate movements and tariff cuts on exit are heterogeneous across plants - particularly pronounced among least efficient plants. Our results reveal multi-dimensional heterogeneity that current models featuring one-dimensional heterogeneity (efficiency differences among plants) cannot fully explain. There are significant and substantial differences between exporters and non-exporters, and between domestic- and foreign- controlled plants. Exporters and foreign-owned plants have much lower failure rates; however, their survival is more sensitive to changes in tariffs and real exchange rates, whether differences in their efficiency levels are controlled or not.

    Release date: 2010-04-14

  • Articles and reports: 11F0027M2009056
    Geography: Canada
    Description:

    This paper examines the characteristics of plants in the manufacturing sector undergoing changes in ownership to further our understanding of the underlying causes of mergers and acquisitions. Previous Canadian studies (Baldwin 1995; Baldwin and Caves 1991) compare the performance of merged plants at the beginning and the end of the 1970s. This paper examines annual changes that occurred over the 1970s, 1980s, and 1990s to provide a longer-run perspective. In doing so, it outlines the amount of change taking place (both the number of plants affected and the share of employment) and the characteristics of plants that led to their takeover. Differences between foreign and domestic takeovers are also examined.

    Release date: 2009-06-04

  • Articles and reports: 88F0006X2008002
    Description:

    This paper is based on the findings of the Survey of Technology and Electronic Commerce (SECT), which in 2005 included a module on business incubation service providers and users. The results of the Survey of Business Incubators (SBI) were discussed in Joseph, Bordt and Hamdani (2006). The main difference between the two surveys is that the SBI focused on business incubators (BIs), firms that provided business incubation as their main line of activity the criterion used to define industry boundaries in statistical systems whereas the SECT covered all firms that provided business incubation services to new companies, whether it was their main activity or a small part of the business.

    Release date: 2008-03-27

  • Articles and reports: 11F0019M2006287
    Geography: Canada
    Description:

    We model the effects of product market competition on agency costs, and develop two main empirical predictions. First, competition, by reducing agency costs, unambiguously increases the importance firms place on quality improvements. This leads to higher powered incentives, and in turn to increased effort and quality. Second, these effects are increasing in the severity of agency problems, and should be stronger in large, hierarchical corporations (where agency problems are more severe) than in entrepreneurial firms. We test the predictions of our model using a unique dataset with both firm and employee characteristics.

    Release date: 2006-12-04

  • Articles and reports: 11-010-X20060109500
    Geography: Canada, Geographical region of Canada
    Description:

    The number and rate of bankruptcies have fallen steadily since the mid-1990s. However, the liabilities from these failures have trended up, implying that more large firms are going bankrupt. There has been a marked narrowing of regional differences in bankruptcy rates.

    Release date: 2006-10-12

  • Articles and reports: 11-624-M2006015
    Geography: Canada
    Description:

    This paper provides an overview of the long-run trend in business bankruptcies in Canada, examines the reaction of bankruptcies by region to the stresses associated with fluctuations in the economy and analyses the relation between the incidence of bankruptcies and the economic health of the regions. Over the past 25 years, Canadian businesses have experienced a number of tumultuous periods. After 2 decades of high bankruptcy associated with 2 major recessions and the implementation of 2 free trade agreements in the 1980s and 1990s, bankruptcies have returned by 2005 to levels experienced in the early 1980s. At the same time, the differences between the bankruptcy rates of Ontario, Quebec and British Columbia fell as the intensity of bankruptcies in these 3 provinces converged. Throughout the period, bankruptcies in these 3 provinces moved in concert with unemployment rates in most provinces. The exceptions are Alberta and Nova Scotia, which experienced marked increases in bankruptcies in the early 1990s.

    Release date: 2006-10-12

  • Articles and reports: 88F0006X2006010
    Description:

    It is well-known that small firms are managed differently from large firms, and this paper provides further evidence in support of this idea while suggesting that some small firms are adopting management behaviours of larger firms. Could these small firms be positioning themselves for growth or using organisational innovation as a tool for survival or adopting some formal organization practices early? In 2004, the Survey of Electronic Commerce and Technology provided a list of eight management practices that according to interviews with small and medium-sized firms indicated potential firm growth. The management practices listed were organisational structures; employee feedback surveys; mentoring or coaching programs; and written strategies for marketing; managing growth; commercialisation of intellectual property; succession management; and risk management.

    Release date: 2006-10-02
Data (16)

Data (16) (0 to 10 of 16 results)

  • Table: 33-10-0164-01
    (formerly: CANSIM 527-0001)
    Geography: Canada
    Frequency: Annual
    Description:

    This table contains 2736 series, with data starting from 2001 (not all combinations necessarily have data for all years). This table contains data described by the following dimensions (Not all combinations are available): Geography (1 item: Canada) Business dynamics measure (16 items: Number of active employer businesses in the private sector; Number of entrants; Number of incumbents; Number of exits; ...) North American Industry Classification System (NAICS) (19 items: Private sector; Agriculture, forestry, fishing and hunting; Mining, quarrying, and oil and gas extraction; Utilities; ...) Firm size (9 items: Private sector; From 0 to less than 100 employees; From 0 to less than 50 employees; Less than 5 employees; ...).

    Release date: 2019-06-10

  • Table: 33-10-0165-01
    (formerly: CANSIM 527-0013)
    Geography: Canada
    Frequency: Quarterly
    Description:

    This table contains 170 series, with data for years 2000 - 2017 (not all combinations necessarily have data for all years). This table contains data described by the following dimensions (Not all combinations are available): Geography (1 item: Canada) Business dynamics measure (10 items: Number of active employer businesses in the private sector; Number of entrants; Number of exits; Entry rate; ...) North American Industry Classification System (NAICS) (17 items: Private sector; Agriculture, forestry, fishing and hunting; Mining, quarrying, and oil and gas extraction; Utilities; ...).

    Release date: 2019-04-03

  • Table: 33-10-0176-01
    Geography: Canada, Geographical region of Canada, Province or territory
    Frequency: Occasional
    Description:

    Percentage of enterprises for which specific events occurred in the main geographical market, by North American Industry Classification System (NAICS) code and enterprise size, based on a one-year observation period. Specific events include entry of new competitor(s), exit of competitor(s), increase in competitive behaviour from existing competitors, and decrease in competitive behaviour from existing competitors.

    Release date: 2019-03-13

  • Table: 33-10-0087-01
    (formerly: CANSIM 527-0007)
    Geography: Geographical region of Canada, Province or territory
    Frequency: Annual
    Description: Counts of Entrants, Incumbents, and Exits by North American Industry Classification System, for each province and territory from the Longitudinal Employment Analysis Program.
    Release date: 2018-11-21

  • Table: 33-10-0088-01
    (formerly: CANSIM 527-0008)
    Geography: Geographical region of Canada, Province or territory
    Frequency: Annual
    Description: Entrants, Incumbents, and Exits by firm size, for each province and territory from the Longitudinal Employment Analysis Program.
    Release date: 2018-11-21

  • Table: 33-10-0136-01
    (formerly: CANSIM 529-0001)
    Geography: Canada
    Frequency: Annual
    Description: Active enterprises with one or more employees, by North American Industry Classification System (NAICS) and enterprise size.
    Release date: 2015-12-07

  • Table: 33-10-0137-01
    (formerly: CANSIM 529-0002)
    Geography: Canada
    Frequency: Annual
    Description: Employer enterprise births, by North American Industry Classification System (NAICS) and enterprise size.
    Release date: 2015-12-07

  • Table: 33-10-0138-01
    (formerly: CANSIM 529-0003)
    Geography: Canada
    Frequency: Annual
    Description: Employer enterprise deaths, by North American Industry Classification System (NAICS) and enterprise size.
    Release date: 2015-12-07

  • Table: 33-10-0139-01
    (formerly: CANSIM 529-0004)
    Geography: Canada
    Frequency: Annual
    Description: Number of employer enterprises newly born having survived one year, by North American Industry Classification System (NAICS) and enterprise size.
    Release date: 2015-12-07

  • Table: 33-10-0140-01
    (formerly: CANSIM 529-0005)
    Geography: Canada
    Frequency: Annual
    Description: Number of employer enterprises newly born having survived two years, by North American Industry Classification System (NAICS) and enterprise size.
    Release date: 2015-12-07
Analysis (63)

Analysis (63) (50 to 60 of 63 results)

  • Articles and reports: 88-003-X19990025344
    Geography: Canada
    Description:

    A Statistics Canada study uses business demographics to learn about innovation and technological change and uncovers interesting patterns. Contrary to expectations, the author uncovered considerable volatility (start-ups and closures) in the service sector. The volatility rate for this sector was 31% compared with 23% for the manufacturing sector. Firms that do not innovate frequently are replaced by new ones that have new or improved products to offer or by those that employ more efficient methods of production and delivery.

    Release date: 2000-01-17

  • Articles and reports: 63-016-X19990024720
    Geography: Canada
    Description:

    This study has two goals. The first is to determine what share of the total chain-store market big-box stores have carved out for themselves in recent years - in terms of numbers and locations, sales and floor space. This information is useful for those concerned with changing market structures, as well as for the general public. Secondly, the "effectiveness" of big-box stores is then compared with that of other stores.

    Release date: 1999-10-13

  • Journals and periodicals: 88-517-X
    Geography: Canada
    Description:

    New firms are seen to play a key role in the innovation process, especially in certain key sectors of the economy. This study therefore examines the differences in the profiles of successful new firms in science-based industries and other industries. The firms that are examined are entrants who survey into their early teen years. The study examines numerous factors that are seen to influence the success of new businesses. These include the competitive environment, business strategies and the financial structure of the businesses.

    Successful new firms in science-based industries are found to differ in a number of dimensions from new firms in other industries. They are more likely to be exporters. They face greater technological change and intense competition with regards to the rate at which new products are being introduced. They tend to put more emphasis on quality, the frequent introduction of new products and the customization of products. They make greater use of information technology. They place more stress on new technology development, research and development facilities and the use of intellectual property. They are much more likely to innovate and they place more importance on recruiting skilled labour and on training. Finally, they are more likely to use non-traditional financial measures to evaluate performance and they are less likely to rely on secured credit for financing both their research and development activity and their machinery and equipment that are firms in other sectors.

    Release date: 1999-03-31

  • Articles and reports: 11F0019M1999121
    Geography: Canada
    Description:

    Entry and exit are important phenomena. This paper reviews the evidence on the size of this process and its contribution to productivity and innovation. It then develops a detailed portrait of the characteristics of new firms that survive and those that fail. In doing so, it examines the type of competencies that are developed in both groups of firms. It asks which competencies are developed by new firms. In particular, it focuses on the innovative capabilities of new firms. It shows that small firms in general and entrants in particular are heterogeneous when it comes to their innovative activity. The types of innovative activity in which they are engaged vary widely. Some focus on research and development (R&D) and new products. Others focus on new technologies. Still others stress the development of human capital. In addition, this paper examines the competitive environment that new firms face and the connection between growth and innovation. It also examines the complementary skills that are employed by innovators. Finally, the paper focuses on the causes of failure in the firm population. It extends earlier work that finds that failing firms differ from surviving firms in terms of basic competencies-management, financial management and marketing capabilities.

    Release date: 1999-02-25

  • Journals and periodicals: 61-525-X
    Geography: Canada
    Description:

    Bankruptcy rates have been increasing in Canada. Almost half of the firms in Canada that go bankrupt do so primarily because of their own deficiencies rather than externally generated problems. They do not develop the basic internal strengths to survive. Overall weakness in management, combined with a lack of market for their product, cause these firms to fail.

    This study suggests that the underlying factor contributing to financial difficulties is management failure rather than external factors associated with imperfect capital markets. Many bankrupt firms face problems in attaining financing in capital markets; but, it is the internal lack of managerial expertise in many of these firms that prevents exploration of different financing options.

    Release date: 1998-04-01

  • Articles and reports: 61-532-X19970013493
    Description:

    The objective of this brief paper is to describe recent trends in the merger and acquisition (M&A) activity in the forest products industry in Canada. The two driving forces most often cited in M&A activity are rising capital costs and full product line servicing. Both of these factors have been at play at various times in the history of forest products industry. However, over the last few years there has been a growing national and global perception that current wood supplies would not be able to satisfy future demand. While the trend away from diversification of earlier decades towards the more recent consolidation of "core" product lines may be the stated reason for the many cases of restructuring, it is felt that the real driving force is the increasing uncertainty associated with raw material supplies. This in turn suggests that possible future "inter-regional" M&A activity may help to secure wood fibre supplies - directly or indirectly - and mitigate increases.

    Release date: 1998-02-02

  • Articles and reports: 11F0019M1997108
    Geography: Canada
    Description:

    Trade exerts generally favourable effects on the performance of domestic manufacturing industries in the dimensions of allocative and productive efficiency. This paper reviews theory and recent evidence on these linkages and also explore a third effect-on the turbulence of competitive conditions and the turnover of business units. Calculations using primary census records for Canada over 1973-1992 indicate, with time and industry effect, controlled, market-share turnover, entry, exit, and mergers all increase with trade exposure. The effect is tied to market structures of differentiated products but broad international disturbances (North American Free Trade Area) also have significant effects. The normative significant of turbulence is mixed but has important positive components.

    Release date: 1997-10-15

  • Articles and reports: 11F0019M1994061
    Geography: Canada
    Description:

    This paper investigates structural change at the national and the regional level in five broadly defined sectors of the Canadian economy -- the natural-resource-based, the labour-intensive, the scale-based, the product-differentiated, and the science-based sectors. Three aspects of change are examined. First, changes in the importance of each sector over the last twenty years are traced. Second, the amount of internal change within each sector -- changes in the importance of individual industries in each sector and the nature of job turnover within industries are examined. Finally, the extent to which wage differentials have widened over time is examined.

    Release date: 1996-09-26

  • Articles and reports: 11F0019M1995078
    Geography: Canada
    Description:

    This paper investigates the dynamics of job reallocation in the manufacturing sector of Canada. It does so by examining the pattern and magnitude of job gain, job loss, and total job turnover due to growth and decline of some firms, and entry and exit of other firms. It also investigates how the effect of cyclical as opposed to structural influences on job turnover have changed over time. Finally, the paper investigates whether the pattern and magnitude of job turnover differ across industries and across regions, and whether the differences are either caused by differences in cyclical sensitivity of job creation and job destruction or in the extent to which restructuring is taking place.

    Release date: 1995-06-30

  • Articles and reports: 11F0019M1994072
    Geography: Canada
    Description:

    This paper examines the maturation process of firms that enter an industry by constructing new plant and investigates the extent to which improvements in the performance of an entry cohort are the result of a selection process that culls out the most inefficient entrants or of a learning process that allows survivors to improve their performance relative to incumbent firms. Both selection and evolutionary learning are related to post-entry performance. Despite the difference in the effect of selection and learning on the amount of post-entry growth, selection per se is a more important contributor to overall growth of a cohort.

    Release date: 1995-04-30
Reference (2)

Reference (2) ((2 results))

  • Surveys and statistical programs – Documentation: 5056
    Description: Science, Innovation and Electronic Information Division is engaged in a joint project with the National Research Council's Industrial Research Assistance Program (IRAP) to investigate the characteristics of growth firms.

  • Surveys and statistical programs – Documentation: 5157
    Description: The objective of the Entrepreneurship Indicators Database is to provide comprehensive business demography statistics and performance indicators for enterprises in Canada.
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