Adjustment to International Competition

Download or read book Adjustment to International Competition written by Richard E. Caves and published by Economic. This book was released on 1990 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report builds on 2 types of research on the structure and performance of Canadian manufacturing industries. One line addresses industries of domestic producers who serve the small Canadian market in competition with imports and is concerned with the productive efficiency of these industries but not with their short-run responses to international competition. The other line concerns the short-run sensitivity of responses of the manufacturing industries' prices, output, and employment levels to disturbances, focused on responses to domestic disturbances but not international. Using annual data on many individual industries, the study builds a statistical model of adjustments to changes in international competition such as changes in prices and varieties of importable goods, and in Canadian tariffs and the exchange rate. It tracks the effects of those changes on the selling prices of Canadian producers, quantities of imports and exports, and the key input decisions of employment and capital expenditures. It draws conclusions about these adjustment processes for the typical manufacturing industry but also shows how these adjustments vary among sectors and types of industries.