Luke Rispoli

Small, Medium-sized and Large Businesses in the Canadian Economy: Measuring Their Contribution to Gross Domestic Product in 2005

The paper estimates the contributions to gross domestic product (GDP) made by small, medium-sized and large businesses in the Canadian business sector for 2005. The contribution of large businesses with 500 or more employees to business-sector GDP was 45.7%. Small and medium-sized businesses, including unincorporated businesses, accounted for the other 54.3%.

Measuring the Contribution of the Unincorporated Sector in the Canadian Economy, 1997 to 2002

This paper sheds light on the contribution of unincorporated enterprises to the Canadian economy in terms of gross domestic product (GDP) from 1997 to 2002. The study separates the aggregate business GDP, including its components, into the unincorporated and incorporated sectors. After describing the key legal and organizational differences between the unincorporated and incorporated sectors, including tax regime, limited liability, and number of entities, employment and capital intensity, it looks at the contribution of the two sectors across various industries. It provides estimates for 25 S-level industries and W-level detail for some of the more important industries of the unincorporated sector. In deriving the estimates, the study used the same data sources as those used in Statistics Canadas Input-Output Accounts. Results of the study suggest that the unincorporated sector contributed

Trends in Gross Domestic Product and Self-Employment of Unincorporated Enterprises in the Canadian Economy, 1987 to 2005

82.2 billion in 2002 representing 10.1% of total business sector GDP, a slight decrease from 11.3% in 1997.

Labour Productivity of Unincorporated Sole Proprietorships and Partnerships: Impact on the Canada-United States Productivity Gap

This paper investigates the evolution of the unincorporated sector using the number of self-employed and gross domestic product (GDP), in that sector over the period 1987 to 2005. Self-employment studies have analyzed various characteristics of self-employed workers, including age, sex, immigration status and education, but have generally lacked measures of GDP associated with unincorporated self-employment. This study redresses the lack of economic data, and estimates GDP by industry arising from unincorporated self-employment. This paper updates the 1997 - 2002 estimates of unincorporated GDP derived by Rispoli (2009). The paper also examines how unincorporated self-employment responded to both overall economic trends and business cycles. The rate of unincorporated self-employment was positively correlated to the unemployment rate in the long run. The paper also looks at incorporated self-employment. (Close to one million self-employed were incorporated in 2005). It investigates its relationship to the same macroeconomic conditions to determine if incorporated self-employment has a profile similar to unincorporated self-employment. Previous self-employment studies have typically treated self-employment as a homogeneous group. This paper examines the differences between the two groups and finds that they react differently to macroeconomic conditions. Incorporated self-employment grew substantially between 1987 and 1999 (averaging 3.8% per year), and continued to grow between 2000 and 2005 (averaging 4.1% per year). The evidence suggests that a shift in self-employment did not occur from unincorporated enterprises to corporations, but that different forces were at work in the two sectors. Over the long run, the unincorporated self-employment rate is positively correlated to the unemployment rate. In contrast, the incorporated self-employment rate is not related to changes in the unemployment rate, but is positively correlated to overall GDP growth.

The Contribution of Small and Medium-Sized Businesses to Gross Domestic Product: A Canada-United States Comparison

This paper asks how the performance of self-employed unincorporated businesses affects the size of the gap in labour productivity between Canada and the United States. To do so, the business sector in each country is divided into unincorporated and corporate businesses, and estimates of labour productivity are generated for each sector. The productivity performance of the unincorporated sector relative to the corporate sector is much lower in Canada than in the United States. As a result, when the unincorporated sector is removed from the estimates for the business sector in each country and only the corporate sectors for the two countries are compared, the gap in the level of productivity between Canada and the United States is reduced. The unincorporated sector consists of both sole proprietorships and partnerships. This paper also investigates the impact of just sole proprietorships on the Canada-United States productivity gap. Sole proprietorships in the two countries more closely resemble one another than do partnerships, as U.S. partnerships are much larger than their Canadian counterparts. When sole proprietorships are removed from the business-sector estimates of each country (allowing a comparison of sole proprietorships to the rest of the business sector, which consists of partnerships and the corporate sector), the gap in labour productivity between Canada and the United States also declines but by only about half as much as when both sole proprietorships and partnerships are removed. The lower productivity of the unincorporated sector (both sole proprietorships and partnerships) accounted for almost the entire productivity gap between Canada and the United States in 1998. Since then, the productivity of the corporate sector in Canada has fallen relative to that of the corporate sector in the United States and the unincorporated sector no longer accounts for the entire gap.

Les petites, moyennes et grandes entreprises dans l'economie canadienne : mesure de leur contribution au produit interieur brut de 2001 a 2008

Adopting the methodology used to produce estimates of gross domestic product (GDP) by size for the United States, this paper estimates GDP for small and medium-sized businesses versus large businesses for the Canadian non-agricultural business sector in 2005. In the entire non-agricultural business sector, small and medium-sized businesses with less than 500 employees account for 54.2% of GDP in Canada and for 50.7% of GDP in the United States. When two industries with heavy government ownership in Canada (health and education) are excluded, the results are 52.9% and 50.3%, respectively.