Globalization and workplace performance in Canada: Cross-sectional and dynamic analyses of productivity and wage outcomes

We start from the premise that firm productivity differences need to be taken into account in the examination of the determination of wages and, more broadly, earnings inequality. Unlike most sociological studies of globalization, in this study using Canadian data we incorporate direct measurement (of some aspects) of globalization, and examine closely the association between workplace productivity and wages on the one hand, and exporting, foreign ownership and outsourcing on the other. We conduct cross-sectional and dynamic analyses. We find the following: (i) there is a relationship between exporting and productivity across different model specifications; (ii) the effects on productivity kick in when a workplace is substantially rather than marginally engaged in export markets; (iii) productivity increases are markedly greater in workplaces where export intensity has increased in prior periods; (iv) productivity is higher in workplaces that are wholly foreign owned; (v) wages are also associated with productivity and with both exporting and foreign ownership.

► Firm productivity differences need to be taken into account in the examination of the determination of wages and earnings inequality. ► We incorporate direct measurement of globalization, and examine closely the association between workplace productivity and wages on the one hand, and exporting, foreign ownership and outsourcing on the other. ► There is a relationship between exporting and productivity across different model specifications. ► The effects on productivity kick in when a workplace is substantially rather than marginally engaged in export markets. ► Productivity increases are markedly greater in workplaces where export intensity has increased in prior periods. ► Productivity is higher in workplaces that are wholly foreign owned. ► Wages are associated with productivity and with both exporting and foreign ownership.