The Economics of FDI: A Canadian Perspective

Transnational Corporations Review, Vol. 1, No. 4, p. 28, 2009

14 Pages Posted: 12 Mar 2012

See all articles by Someshwar Rao

Someshwar Rao

Independent

Malick Souare

affiliation not provided to SSRN

Weimin Wang

Industry Canada - Micro-Economic Policy Analysis Branch (MEPA)

Date Written: 2009

Abstract

This paper reviews trends in inward foreign direct investment (IFDI) and multinational production in Canada, as well as Canada’s direct investment abroad, and provides an assessment of their impact on the Canadian economy. It pulls together a large body of existing empirical literature in Canada and other countries on the economic costs and benefits of FDI. The main conclusion of the paper is that both inward and outward FDI provide significant net long-term economic benefits to both home and host countries, provided they maintain competitive and dynamic product and factor markets as well as a competitive business climate. In addition, there is little evidence of a ‘hollowing-out’ of corporate Canada in terms of multinational enterprises operating in Canada moving their corporate headquarters out of the country.

Keywords: inward foreign direct investment, multinational enterprises, Canada, economic policy, investment

Suggested Citation

Rao, Someshwar and Souare, Malick and Wang, Weimin, The Economics of FDI: A Canadian Perspective (2009). Transnational Corporations Review, Vol. 1, No. 4, p. 28, 2009, Available at SSRN: https://ssrn.com/abstract=2019694

Malick Souare

affiliation not provided to SSRN ( email )

Weimin Wang

Industry Canada - Micro-Economic Policy Analysis Branch (MEPA) ( email )

C.D. Howe Building
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