Wessel Vermeulen, Newcastle University - May 27, 2019

May 27, 2019

Wessel Vermeulen, Newcastle University will present a seminar at 10:30 AM in Arts 807

Seminar Title: Manufacturing in a Natural Resource Based Economy: Evidence from Canadian Plants

Abstract:

This study investigates the effects of an oil boom on firms’ performance using data from the Canadian Annual Survey of Manufactures. We exploit the time variation of the booming sector activity in the oil-producing area with the location of manufacturing plants. We hypothesize that the effect of the booming sector on plants depends on their spatial proximity, which allows us to create an exogenous treatment variable. The outcome variables include plant-level wages, employment, sales, and exports. We find that the effect of the booming sector on the incidence of exporting varies greatly by plant-level productivity. More productive plants become more likely to export relative to less productive plants. They can do so by paying a higher wage, while employment grows less than plants that serve only the domestic market. We find that initial productivity and plants’ ability to export provides an important differentiation in average plants effects. In particular, while there is a great variety in the effect by sector, a clear linkage with the resource industry is not observed.