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International Regional Science Review
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Trade and the Industrial Specialization of Canadian Manufacturing Regions, 1974 to 1999

W. Mark Brown

Statistics Canada, Ottawa, mark.brown{at}statcan.ca

Using a longitudinal micro data file of manufacturing plants (1974 to 1999), this study tests the relationship between trade and industrial specialization experienced by regional manufacturing economies. Consistent with trade driven by comparative advantage, the analysis demonstrates that export intensity (exports as a share of output) is positively associated with industrial specialization. This association is strongest in cross-section but remains, albeit weaker, when the data are differenced throughout time. The association between trade and specialization is strongest outside of urban areas and Ontario and Quebec, regions where trade is most likely driven by access to resource endowments. The association between trade and specialization weakens significantly after 1990, a period that corresponds with the rapid integration of the Canadian economy into the U.S. market resulting from trade liberalization.

Key Words: international trade • comparative advantage • regional industrial specialization • manufacturing

International Regional Science Review, Vol. 31, No. 2, 138-158 (2008)
DOI: 10.1177/0160017607309447
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[Abstract] [Full Text] [PDF]