Productivity and business R&D A study of Canadian food manufacturing industries, 1994-2005

Purpose - This paper aims to examine the contribution of physical capital, skilled labor, research and development (R&D), and imports to the productivity of ten Canadian food and beverage manufacturing sectors. Design/methodology/approach - A Cobb-Douglas production function is estimated to discern the relative contribution of physical versus R&D knowledge capital in fostering productivity growth. The paper uses a balanced panel dataset and is based on pooled cross-sectional time series data for ten food and beverage manufacturing industries over the period 1994-2005. The methodological framework adopted in this paper is a cross-sectionally correlated and time-wise autoregressive model. Data employed in this paper are from Statistics Canada's annual survey of manufacturing industries and Canadian Socio-economic Information Management computerized database. Findings - The results show that food manufacturing productivity for ten food and beverage sectors is more responsive to physical capital than R&D knowledge capital. Some of the other determinants of labor productivity in food manufacturing included the contribution from university-educated workers. Originality/value - The paper is useful to both policy makers and academics in the research fields of R&D and productivity. It provides some interesting insights into the contribution of physical and knowledge capital to food manufacturing industry productivity.