Rapport, Centre de transfert d'entreprise du Québec, 2019
In this report published by the Centre de transfert d'entreprise du Québec, a non-profit organiza... more In this report published by the Centre de transfert d'entreprise du Québec, a non-profit organization, we present a descriptive statistical snapshot of SME business transfers in Quebec and Canada using Statistics Canada's 2017 Survey on Financing and Growth of SMEs (SFGSME). First, we show that, among other things, the proportion of Quebec SMEs originating from business transfers increased from 25% to 32% between 2007 and 2017 compared to 23% and 25% for the whole of Canada. Second, we also show that SME business transfer intentions jumped 5% in Quebec and 3.5% for Canada over 2007-2017. This represents an important increase of more than 8,000 additional SMEs to be transferred to Quebec and 25,000 SMEs for the entire Canadian economy over the 2017-2022 period.
Are more competitive industries more innovative? Empirical investigation into various theories of... more Are more competitive industries more innovative? Empirical investigation into various theories of innovation in industrial organization, agency theory, or endogenous growth, make diverse predictions with respect to this long-standing open question in economics. In this paper, we investigate the empirical relationship between competition intensity and firm innovation using a new micro-database containing a large sample of Canadian manufacturing enterprises over the 2000-05 period. Using three different measures of competition intensity, we find evidence that competition intensity is positively related to firm-level expenditures on research and development (R&D) in Canadian manufacturing industries. However, we also find that this relationship is dampened when more firms are further from the technological frontier of their industry. Nevertheless, the results provide evidence for a Schumpeterian interpretation, whereby market power can increase business incentives for innovation when many firms are technological laggards.
This paper characterizes the general equilibrium foundation of arbitrary partial equilibrium welf... more This paper characterizes the general equilibrium foundation of arbitrary partial equilibrium welfare analysis in second-best economies. While prior theory recognizes the importance of market distortions affected by relative price changes, it offers little guidance about the necessary scope of Marshallian partial equilibrium analysis. The paper determines necessary and sufficient conditions for optima of Marshallian total surplus functions to characterize second-best Pareto-optimal allocations. While these conditions confirm much of the traditional approach to applied welfare economics, they bring doubt about its reliability for public policy and concerns over its systematic use to build conventional economic wisdom.
La Loi sur la concurrence est sans contredit l'une des lois les plus sophistiquées d'un point de ... more La Loi sur la concurrence est sans contredit l'une des lois les plus sophistiquées d'un point de vue économique jamais mises en vigueur au Canada. Ainsi a-t-on soutenu que l'ultime objectif des dispositions de la Loi sur la concurrence en matière de fusionnement serait de promouvoir l'efficacité économique de l'économie canadienne. Cet article élabore une proposition logique basée sur les interprétations juridiques des dispositions de fusionnement de la Loi sur la concurrence selon laquelle l'objectif normatif sous-tendant la loi s'oppose à la redistribution de la richesse causée par un accroissement du pouvoir de marché par rapport à l'allocation économique établie (c.-à-d. le statu quo). Cette analyse positive implique que l'objectif de bien-être social sous-jacent à la loi antitrust canadienne ne concorde pas avec la perspective usuelle sur le rôle des institutions publiques en matière de politique de la concurrence au Canada.
En pleine pandémie de la COVID-19, un sondage de Statistique Canada révélait que presque 50 000 p... more En pleine pandémie de la COVID-19, un sondage de Statistique Canada révélait que presque 50 000 propriétaires dirigeants avec au moins un employé affirmaient avoir l'intention de procéder au transfert de leur entreprise avant la fin de l'année 2022. Ailleurs, en 2011, on estimait à 450 000 le nombre de PME européennes à transmettre, alors que parmi elles, 300 000 y parviendraient, causant une perte annuelle estimée de 160 000 emplois (Commission européenne, 2011).
Les bénéfices économiques nets d’ «aplanir la courbe de contagion de la COVID-19» sont directemen... more Les bénéfices économiques nets d’ «aplanir la courbe de contagion de la COVID-19» sont directement liés au risque de mortalité du virus SARS-CoV-2 résultant des prévisions épidémiologiques du taux de mortalité des cas critiques et des taux d'infection en tenant compte des coûts (d’opportunité) économiques de gestion publique de la capacité du système de santé qui incluent les coûts économiques du confinement et de la distanciation sociale (ex. fermeture des commerces, violence conjugale) et les coûts associés à l’augmentation de la capacité du système de santé (ex. l’achat de matériel médical et l’augmentation du nombre de lits disponibles pour le traitement de la COVID-19). En complément à d’autres analyses économiques des mesures de confinement qui ont été faites sur la COVID-19 jusqu’à présent, j’évalue dans cette note les bénéfices-coûts des mesures qui visent à «aplanir la courbe» de contamination en fonction de la capacité du système de santé à traiter les cas les plus critiques de la COVID-19, c’est-à-dire les cas qui nécessitent une hospitalisation prolongée et une intubation ou un ventilateur. Ne disposant pas des prévisions épidémiologiques des autorités de la Santé publique pour le Québec, la variable (exogène) principale de l’analyse bénéfices-coûts est le pourcentage de la population qui sera infectée par le virus SARS-CoV-2 sur une période de temps nécessaire la vaccination. Je suppose que cette période est de 365 jours. L’analyse montre, sous différentes hypothèses clairement énoncées, que les différents règlements mis-en-oeuvre pour «aplanir la courbe» de contamination pourraient réduire le nombre de décès prématurés (évitables) de la COVID-19 au Québec de 12 000 à 69 000 approximativement sur une période de 365 jours. Mes calculs préliminaires des bénéfices économiques nets résultant des mesures de confinement suggèrent qu’ils sont de l’ordre de 0,9 à 1,5 fois le PIB annuel du Québec avec des taux de contamination de 60 % et 70 %, respectivement, mais que les bénéfices économiques de ces mesures sont nuls si le taux d'infection de la population demeure en-dessous de 46 %, approximativement. Si l’on tient compte du potentiel des mesures de confinement de réduire le taux d’infection en plus de maintenir le nombre de cas critiques en-dessous de la capacité de traitement sur une période de 365 jours, alors les bénéfices économiques des mesures de confinement grimpent à 1,05 à 1,7 fois le PIB annuel lorsque les mesures de confinement réduisent le taux de contamination de 10 points de pourcentage à partir de taux de contamination de 60 % et 70 %, respectivement, et de 1,21 à 1,8 fois le PIB annuel québécois si les mesures de confinement réduisent le taux de contamination de 20 points de pourcentage à partir de taux de contamination de 60 % et 70 %.
This paper argues that economic expertise into competition policy decision-making is marginalized... more This paper argues that economic expertise into competition policy decision-making is marginalized because of two important factors associated with the judicialization of competition policy institutions. First, the incentives provided by legal competition policy institutions to individuals are not conducive to promote the use of rigorous and modern economics arguments. Second, a widening economic knowledge-gap between participants makes it increasingly difficult for modern economic arguments to make their way effectively in legal decision-making relating to competition policy. These two institutional factors promote the use of economic expertise for supporting one's own conclusions, the red-light district of competition policy, rather than as a specialized expertise which provides the positive and normative logical analysis of competition policy problems.
The strong propensity of immigrants to engage in entrepreneurial activities is of direct concern ... more The strong propensity of immigrants to engage in entrepreneurial activities is of direct concern to governments because economic development issues are increasingly linked to various policies of countries facing economic growth challenges. This empirical study highlights the influence of immigrant status on the high-performance aspirations of emerging entrepreneurs. Using data from the 2012 Global Entrepreneurship Monitor, we show that immigrant status significantly and positively influences three of the four high- performance dimensions of entrepreneurial aspirations recognized to promote higher economic development potential: process innovations, high export intensity and high growth of employment. These results suggest that the immigrant entrepreneur is possibly a more important cog in the forces of creative destruction of an economy, an important issue which we propose to look in future research.
Contextual Entrepreneurship Research: Frontiers in European Entrepreneurship Research, 2021
Public policy in developed countries is increasingly focused on ambitious, high-growth, high-impa... more Public policy in developed countries is increasingly focused on ambitious, high-growth, high-impact, high-quality or what we term here high-performance entrepreneurship. Despite their alternative meanings, these complementary concepts of high-performance entrepreneurship commonly refer to the portion of entrepreneurial activities responsible for the largest share of economic benefits in terms of jobs, innovation, productivity, or output (Autio and Ranniko 2016). Given the higher rates of entrepreneurship by foreign-born individuals (or immigrants) compared to native-born individuals in several developed nations, recent studies have increasingly focused on the antecedents and outcomes of immigrant entrepreneurship (Aliaga-Isla and Rialp 2013; Dheer 2018). While some early empirical research suggests that many immigrant entrepreneurs were “pushed” into lower-performing self-employment or necessity entrepreneurship (Borjas 1986; Clark and Drinkwater 2000), more recent empirical research often finds that immigrant entrepreneurs perform on average equally, if not better, than native-born entrepreneurs on a variety of metrics such as business financing, sales, exports, profits, or patents. From a human capital theory perspective (Marvel et al. 2016), the mounting empirical evidence of the over-representation and superior performance of immigrant entrepreneurship activities raises a number of research questions that go beyond those limited to Schumpeterian economic growth. First, it raises the question as to why the relative performance of immigrants in entrepreneurial activities appears more favorable than in labor markets. And, second, the evidence also begs for an explanation for why immigrants may be able to overcome barriers to entrepreneurship relatively more easily than they are able to in labor markets. An understanding of these questions can be gained through the seminal mixed-embeddedness theory that recognizes that meso-level market entry barriers (e.g. minimum efficient scale, small ethnic market size) and macro-level institutional barriers (e.g. permits, occupational licensing regulations) can impede immigrant entrepreneurship. In this paper, we consider the potentially deleterious effects of many meso-level information barriers and failures such as statistical discrimination, adverse selection, or both. We test this hypothesis using data from the 2012 and 2013 Adult Population Survey of the Global Entrepreneurship Monitor (GEM). Our estimations of a sample of 7,178 early-stage entrepreneurs in 28 developed countries show that necessity early-stage immigrant entrepreneurs, those we argue that are most likely to face information barriers about their micro-level resources, use more novel technologies than native-born entrepreneurs. Since more novel technologies are generally more advanced, expensive, and productive, we argue that our empirical result contributes a novel explanation for the relative performance of immigrant entrepreneurs compared to their native-born peers. This result, consistent with the theory and empirical evidence of competitive signaling and statistical discrimination in labor markets contributes to the growing body of empirical research on the market barriers to immigrant entrepreneurship.
Rapport, Centre de transfert d'entreprise du Québec, 2019
In this report published by the Centre de transfert d'entreprise du Québec, a non-profit organiza... more In this report published by the Centre de transfert d'entreprise du Québec, a non-profit organization, we present a descriptive statistical snapshot of SME business transfers in Quebec and Canada using Statistics Canada's 2017 Survey on Financing and Growth of SMEs (SFGSME). First, we show that, among other things, the proportion of Quebec SMEs originating from business transfers increased from 25% to 32% between 2007 and 2017 compared to 23% and 25% for the whole of Canada. Second, we also show that SME business transfer intentions jumped 5% in Quebec and 3.5% for Canada over 2007-2017. This represents an important increase of more than 8,000 additional SMEs to be transferred to Quebec and 25,000 SMEs for the entire Canadian economy over the 2017-2022 period.
Are more competitive industries more innovative? Empirical investigation into various theories of... more Are more competitive industries more innovative? Empirical investigation into various theories of innovation in industrial organization, agency theory, or endogenous growth, make diverse predictions with respect to this long-standing open question in economics. In this paper, we investigate the empirical relationship between competition intensity and firm innovation using a new micro-database containing a large sample of Canadian manufacturing enterprises over the 2000-05 period. Using three different measures of competition intensity, we find evidence that competition intensity is positively related to firm-level expenditures on research and development (R&D) in Canadian manufacturing industries. However, we also find that this relationship is dampened when more firms are further from the technological frontier of their industry. Nevertheless, the results provide evidence for a Schumpeterian interpretation, whereby market power can increase business incentives for innovation when many firms are technological laggards.
This paper characterizes the general equilibrium foundation of arbitrary partial equilibrium welf... more This paper characterizes the general equilibrium foundation of arbitrary partial equilibrium welfare analysis in second-best economies. While prior theory recognizes the importance of market distortions affected by relative price changes, it offers little guidance about the necessary scope of Marshallian partial equilibrium analysis. The paper determines necessary and sufficient conditions for optima of Marshallian total surplus functions to characterize second-best Pareto-optimal allocations. While these conditions confirm much of the traditional approach to applied welfare economics, they bring doubt about its reliability for public policy and concerns over its systematic use to build conventional economic wisdom.
La Loi sur la concurrence est sans contredit l'une des lois les plus sophistiquées d'un point de ... more La Loi sur la concurrence est sans contredit l'une des lois les plus sophistiquées d'un point de vue économique jamais mises en vigueur au Canada. Ainsi a-t-on soutenu que l'ultime objectif des dispositions de la Loi sur la concurrence en matière de fusionnement serait de promouvoir l'efficacité économique de l'économie canadienne. Cet article élabore une proposition logique basée sur les interprétations juridiques des dispositions de fusionnement de la Loi sur la concurrence selon laquelle l'objectif normatif sous-tendant la loi s'oppose à la redistribution de la richesse causée par un accroissement du pouvoir de marché par rapport à l'allocation économique établie (c.-à-d. le statu quo). Cette analyse positive implique que l'objectif de bien-être social sous-jacent à la loi antitrust canadienne ne concorde pas avec la perspective usuelle sur le rôle des institutions publiques en matière de politique de la concurrence au Canada.
En pleine pandémie de la COVID-19, un sondage de Statistique Canada révélait que presque 50 000 p... more En pleine pandémie de la COVID-19, un sondage de Statistique Canada révélait que presque 50 000 propriétaires dirigeants avec au moins un employé affirmaient avoir l'intention de procéder au transfert de leur entreprise avant la fin de l'année 2022. Ailleurs, en 2011, on estimait à 450 000 le nombre de PME européennes à transmettre, alors que parmi elles, 300 000 y parviendraient, causant une perte annuelle estimée de 160 000 emplois (Commission européenne, 2011).
Les bénéfices économiques nets d’ «aplanir la courbe de contagion de la COVID-19» sont directemen... more Les bénéfices économiques nets d’ «aplanir la courbe de contagion de la COVID-19» sont directement liés au risque de mortalité du virus SARS-CoV-2 résultant des prévisions épidémiologiques du taux de mortalité des cas critiques et des taux d'infection en tenant compte des coûts (d’opportunité) économiques de gestion publique de la capacité du système de santé qui incluent les coûts économiques du confinement et de la distanciation sociale (ex. fermeture des commerces, violence conjugale) et les coûts associés à l’augmentation de la capacité du système de santé (ex. l’achat de matériel médical et l’augmentation du nombre de lits disponibles pour le traitement de la COVID-19). En complément à d’autres analyses économiques des mesures de confinement qui ont été faites sur la COVID-19 jusqu’à présent, j’évalue dans cette note les bénéfices-coûts des mesures qui visent à «aplanir la courbe» de contamination en fonction de la capacité du système de santé à traiter les cas les plus critiques de la COVID-19, c’est-à-dire les cas qui nécessitent une hospitalisation prolongée et une intubation ou un ventilateur. Ne disposant pas des prévisions épidémiologiques des autorités de la Santé publique pour le Québec, la variable (exogène) principale de l’analyse bénéfices-coûts est le pourcentage de la population qui sera infectée par le virus SARS-CoV-2 sur une période de temps nécessaire la vaccination. Je suppose que cette période est de 365 jours. L’analyse montre, sous différentes hypothèses clairement énoncées, que les différents règlements mis-en-oeuvre pour «aplanir la courbe» de contamination pourraient réduire le nombre de décès prématurés (évitables) de la COVID-19 au Québec de 12 000 à 69 000 approximativement sur une période de 365 jours. Mes calculs préliminaires des bénéfices économiques nets résultant des mesures de confinement suggèrent qu’ils sont de l’ordre de 0,9 à 1,5 fois le PIB annuel du Québec avec des taux de contamination de 60 % et 70 %, respectivement, mais que les bénéfices économiques de ces mesures sont nuls si le taux d'infection de la population demeure en-dessous de 46 %, approximativement. Si l’on tient compte du potentiel des mesures de confinement de réduire le taux d’infection en plus de maintenir le nombre de cas critiques en-dessous de la capacité de traitement sur une période de 365 jours, alors les bénéfices économiques des mesures de confinement grimpent à 1,05 à 1,7 fois le PIB annuel lorsque les mesures de confinement réduisent le taux de contamination de 10 points de pourcentage à partir de taux de contamination de 60 % et 70 %, respectivement, et de 1,21 à 1,8 fois le PIB annuel québécois si les mesures de confinement réduisent le taux de contamination de 20 points de pourcentage à partir de taux de contamination de 60 % et 70 %.
This paper argues that economic expertise into competition policy decision-making is marginalized... more This paper argues that economic expertise into competition policy decision-making is marginalized because of two important factors associated with the judicialization of competition policy institutions. First, the incentives provided by legal competition policy institutions to individuals are not conducive to promote the use of rigorous and modern economics arguments. Second, a widening economic knowledge-gap between participants makes it increasingly difficult for modern economic arguments to make their way effectively in legal decision-making relating to competition policy. These two institutional factors promote the use of economic expertise for supporting one's own conclusions, the red-light district of competition policy, rather than as a specialized expertise which provides the positive and normative logical analysis of competition policy problems.
The strong propensity of immigrants to engage in entrepreneurial activities is of direct concern ... more The strong propensity of immigrants to engage in entrepreneurial activities is of direct concern to governments because economic development issues are increasingly linked to various policies of countries facing economic growth challenges. This empirical study highlights the influence of immigrant status on the high-performance aspirations of emerging entrepreneurs. Using data from the 2012 Global Entrepreneurship Monitor, we show that immigrant status significantly and positively influences three of the four high- performance dimensions of entrepreneurial aspirations recognized to promote higher economic development potential: process innovations, high export intensity and high growth of employment. These results suggest that the immigrant entrepreneur is possibly a more important cog in the forces of creative destruction of an economy, an important issue which we propose to look in future research.
Contextual Entrepreneurship Research: Frontiers in European Entrepreneurship Research, 2021
Public policy in developed countries is increasingly focused on ambitious, high-growth, high-impa... more Public policy in developed countries is increasingly focused on ambitious, high-growth, high-impact, high-quality or what we term here high-performance entrepreneurship. Despite their alternative meanings, these complementary concepts of high-performance entrepreneurship commonly refer to the portion of entrepreneurial activities responsible for the largest share of economic benefits in terms of jobs, innovation, productivity, or output (Autio and Ranniko 2016). Given the higher rates of entrepreneurship by foreign-born individuals (or immigrants) compared to native-born individuals in several developed nations, recent studies have increasingly focused on the antecedents and outcomes of immigrant entrepreneurship (Aliaga-Isla and Rialp 2013; Dheer 2018). While some early empirical research suggests that many immigrant entrepreneurs were “pushed” into lower-performing self-employment or necessity entrepreneurship (Borjas 1986; Clark and Drinkwater 2000), more recent empirical research often finds that immigrant entrepreneurs perform on average equally, if not better, than native-born entrepreneurs on a variety of metrics such as business financing, sales, exports, profits, or patents. From a human capital theory perspective (Marvel et al. 2016), the mounting empirical evidence of the over-representation and superior performance of immigrant entrepreneurship activities raises a number of research questions that go beyond those limited to Schumpeterian economic growth. First, it raises the question as to why the relative performance of immigrants in entrepreneurial activities appears more favorable than in labor markets. And, second, the evidence also begs for an explanation for why immigrants may be able to overcome barriers to entrepreneurship relatively more easily than they are able to in labor markets. An understanding of these questions can be gained through the seminal mixed-embeddedness theory that recognizes that meso-level market entry barriers (e.g. minimum efficient scale, small ethnic market size) and macro-level institutional barriers (e.g. permits, occupational licensing regulations) can impede immigrant entrepreneurship. In this paper, we consider the potentially deleterious effects of many meso-level information barriers and failures such as statistical discrimination, adverse selection, or both. We test this hypothesis using data from the 2012 and 2013 Adult Population Survey of the Global Entrepreneurship Monitor (GEM). Our estimations of a sample of 7,178 early-stage entrepreneurs in 28 developed countries show that necessity early-stage immigrant entrepreneurs, those we argue that are most likely to face information barriers about their micro-level resources, use more novel technologies than native-born entrepreneurs. Since more novel technologies are generally more advanced, expensive, and productive, we argue that our empirical result contributes a novel explanation for the relative performance of immigrant entrepreneurs compared to their native-born peers. This result, consistent with the theory and empirical evidence of competitive signaling and statistical discrimination in labor markets contributes to the growing body of empirical research on the market barriers to immigrant entrepreneurship.
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