Table 6
Impact of tariff and real exchange rate on labour productivity growth

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Impact of tariff and real exchange rate on labour productivity growth: Part 1
  Entrants versus continuing non-exporters Exiters versus continuing exporters
Specification (1) Specification (2) Specification (1) Specification (2)
  estimate standard error estimate standard error estimate standard error estimate standard error
Average tariff changes 0.255 0.269 … … 0.090 0.448 … …
Canadian tariff changes … … 0.278 0.181 … … 0.163 0.324
U.S tariff changes … … -0.249 0.358 … … -0.228 0.559
U.S/Canada real exchange rate changes -0.694 ** 0.068 -0.706 ** 0.068 -0.774 ** 0.122 -0.777 ** 0.122
Dummy 4.149 ** 0.356 4.148 ** 0.357 -5.696 ** 0.370 -5.686 ** 0.371
Dummy × average tariff changes 0.375 0.398 … … -0.291 0.554 … …
Dummy × Canadian tariff changes … … 0.048 0.324 … … 0.024 0.531
Dummy × U.S tariff changes … … 0.485 0.520 … … -0.442 0.863
Dummy × real exchange rate changes -0.694 ** 0.074 -0.687 ** 0.074 0.539 ** 0.122 0.534 ** 0.123
Relative labour productivity -4.359 ** 1.408 -4.359 ** 1.408 -5.370 ** 0.821 -5.369 ** 0.820
Relative employment 0.381 ** 0.094 0.381 ** 0.094 0.450 ** 0.081 0.449 ** 0.081
Age -0.060 ** 0.014 -0.060 ** 0.014 0.005 0.025 0.005 0.025
Foreign-control 2.812 ** 0.969 2.815 ** 0.970 1.200 ** 0.284 1.201 ** 0.284
Industry real-gross-shipment growth 0.046 ** 0.009 0.046 ** 0.009 0.021 0.014 0.021 0.014
Impact of tariff and real exchange rate on labour productivity growth: Part 2
Diagnostic statistics Specification (1) Specification (2) Specification (1) Specification (2)
Number of observations 34,243 34,243 10,030 10,030
R-squared 0.20 0.20 0.24 0.24
Note(s):
** and * significant at the 5 percent and 10 percent levels respectively. Specification (1) uses average tariff changes between Canada and the United States in the regression, while specification (2) uses Canadian tariff changes and U.S. tariff changes. "Dummy" is a dummy variable which takes the value of one if a plant enters export markets during the period and zero if it remains a non-exporter. Similarly "Dummy" equals one if a plant exits export markets during the period and zero if it remains an exporter.
Source(s):
Authors' calculations.