Report debunks myths tied to energy firms of all sizes to facilitate
CALGARY, July 19, 2012 /CNW/ - In a report published today by The School
of Public Policy, authors Robert Mansell, Michal Moore, Jennifer Winter
and Matt Krzepkowski challenge some common misconceptions about firm
size in the energy industry.
The authors conduct an empirical analysis of the behaviour and
performance of 340 Emerging Juniors, Juniors, Intermediates and Majors
around key metrics like employment growth and productivity of assets.
"These differences in size, role and performance must be understood to
help guide the formulation of sound public policy," Mansell said today.
One myth that the authors tackle is the notion that small companies have
higher growth rates, create more jobs and are more innovative, and
therefore should be treated preferentially compared to large companies
in areas such as tax policy.
Their analysis finds that the largest firms (with over 500 employees)
showed the highest rate of employment growth and accounted for almost
70 percent of the employment increase in the oil and gas sector over
Majors also showed far more stability over this time period: the
variation of Majors in operation ranged between 13 and 15 firms,
whereas the number of Emerging Juniors fluctuated between 34 and 144,
and Juniors between 28 and 69.
Based on these findings the authors conclude that "while Emerging
Juniors and Juniors represent an important entrepreneurial element of
the oil and gas sector, if the objective is employment or activity
creation in this sector, it is unlikely that policies targeting smaller
firms would be effective in achieving these objectives."
In terms of a takeaway for government, Mansell said "policymakers should
favour neutrality rather than entertain demands for preferential
treatment for firms of specific sizes."
The report can be found at www.policyschool.ucalgary.ca/publications
SOURCE The School of Public Policy - University of Calgary
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