Data Shows Exporting Firms are the Most Productive

Canadian exporters tend to be larger, more efficient, produce more output, provide more jobs and pay higher salaries than their non-exporting counterparts, reveals recent research by the Office of the Chief Economist.

The research is based on exporter profile data from Statistics Canada for the period from 2000 to 2012, the latest available data which was released recently upon completion of an analysis. It indicates that on average, firms that export abroad are more productive overall than those focusing only on the domestic market.

Table 1: Exporters and Non-exporters of Canadian Manufacturing Industries

 ExportersNon-exporters
Number13,53834,138
Proportion of Medium and Large Sized Firms17%2%
Average Manufacturing Output per Firm$3,380,000$290,000
Total Production Workers902,913315,962

Source: Calculated by the Office of the Chief Economist based on data from Statistics Canada

On average, the value added per employee—a simple measure of productivity—was 14 percent higher for exporters than for non-exporters after adjustments are made for industry effects, firm size effects and geographical location effects. Wages paid by exporters were 10 percent higher, on average, than wages paid by non-exporters of the same size in the same industry and location.

Exporters employed more workers than non-exporters. Only 28 to 30 percent of approximately 50,000 Canadian manufacturers included in the research were found to be exporting. While exporting firms accounted for only a small proportion of Canadian manufacturing population, these companies employed more than 70 percent of the manufacturing workforce.

Engaging in international trade requires additional resources to gather market information, develop customer networks in foreign markets, and comply with local regulations and standards in foreign countries. These are likely contributing factors resulting in only the most productive firms having the capacity and profit margins to cover the higher costs of international business.

The Upshot

The research suggests that on average, exporters represent the most competitive manufacturers in the Canadian economy.

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