The Economics of FDI: A Canadian Perspective

Rao, Someshwar; Souare, Malick; Wang, Weimin

doi:10.1080/19186444.2009.11658211

Cited by 6 publications

(5 citation statements)

References 25 publications

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“…Investing abroad and at home 2. See Kokko (2006), Rao et al (1994), Rao et al (2009), Desai et al (2009) and Globerman (2012) for original evidence and reviews of existing studies.…”

Section: Notesmentioning

confidence: 99%

Investing abroad and investing at home: complements or substitutes?

Globerman

2012

Multinational Business Review

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PurposeThe purpose of the study is to assess whether outward foreign direct investment (OFDI) and home country capital investment are substitutes or complements.Design/methodology/approachCase studies of 22 Canadian multinational companies (MNCs) were carried out, and the qualitative and quantitative information from the case studies was used to evaluate whether OFDI and home country capital investment were substitutes or complements for the sample MNCs over the period 2000‐2010.FindingsTwo primary strategic motives were identified for the OFDI undertaken by the sample MNCs: market‐seeking; and resource‐seeking. Across the sample, domestic investment was typically a poor strategic alternative to OFDI. Furthermore, OFDI promoted faster revenue growth for the MNCs which stimulated increased domestic investment in later time periods. Hence, OFDI and domestic capital investment are complements in the longer run.Practical implicationsHome country government policies that directly or indirectly discourage OFDI will also discourage domestic investment by home country MNCs. This, in turn, might discourage investment by small and medium‐sized enterprises in the home country, if government limitations on OFDI hamper the growth of MNC head offices in the home country.Originality/valueThe study provides evidence drawing on case studies rather than traditional econometric models. The case study methodology provides evidence on the underlying strategic imperatives for OFDI that is not identified by econometric studies.

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“…Investing abroad and at home 2. See Kokko (2006), Rao et al (1994), Rao et al (2009), Desai et al (2009) and Globerman (2012) for original evidence and reviews of existing studies.…”

Section: Notesmentioning

confidence: 99%

Investing abroad and investing at home: complements or substitutes?

Globerman

2012

Multinational Business Review

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“…Canada has always been a safe and reliable nation for foreign investment, and FDI has always played an essential role in the Canadian economy (Rao, Souare, & Wang, 2009;Rao and Zhang 2019;Tang, Wang, & Yu, 2020;Wang, 2014). However, to accelerate the recovery from the crisis under increased competition for FDI in a post coronavirus world, Canada needs ensure its policies continue to be pro-competitive in this changing environment in supporting current multinationals operating in Canada as well as Canadian multinationals operating abroad.…”

Section: Discussionmentioning

confidence: 99%

Canadian FDI in a post COVID-19 world: have we reached the tipping point?

Hejazi

2021

Transnational Corporations Review

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The highly contagious COVID-19 virus spread across the world in a matter of months, beginning in the second half of 2019 and being declared a global pandemic by March, 2020. To limit its continued spread, large parts of economies around the world were shut down, including in Canada and the USA. These actions resulted in levels of unemployment and contractions in GDP not seen since the Great Depression. Superimposed on these truly extraordinary events have been global supply challenges which manifested themselves in an inability of governments to procure critical medical equipment, which exacerbated the health care crisis, increased protectionist sentiments, and led to new protectionist legalisation across many countries. Furthermore, the COVID-19 shock will reinforce trends that were already present globally to shorten supply chains and slow FDI growth, serving as an important tipping point that should encourage governments to consider policies to mitigate the impact of such changes on host economies. This paper considers how these economic, financial, and legislative developments will likely impact FDI patterns for years to come.

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“…Studies show that foreign-controlled firms in Canada are significantly more productive than Canadian-controlled firms because they are more innovative and benefit from advanced technology and superior managerial practices than their parents (Rao, Souare, and Wang 2009;Tang and Rao 2003). A positive coefficient is thus expected.…”

Section: Foreign Controlledmentioning

confidence: 99%

Multinationals and Offshoring: Firm-Level Evidence from Canada

Tang

Assche

2017

Canadian Public Policy

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Les multinationales ont longtemps été reconnues comme des piliers importants de l'économie canadienne, puisque ces entreprises sont responsables de la majorité des exportations du pays et d'une part importante de l'emploi. En même temps, selon une opinion largement répandue, les multinationales seraient moins ancrées dans l'économie canadienne et auraient par conséquent plus tendance à procéder à des délocalisations : c'est cette perception que les auteurs tentent de vérifier dans cet article, grâce à des combinaisons de données canadiennes au niveau des entreprises. Les résultats montrent que les multinationales (étrangères et canadiennes) ont effectivement plus tendance à procéder à des délocalisations, mais que cela n'est pas nécessairement dû au fait qu'elles sont moins ancrées dans l'économie canadienne. Les auteurs observent également différentes associations entre les délocalisations et certaines caractéristiques des entreprises (dont la productivité) selon le type de délocalisation (intra-entreprise ou inter-entreprise, par exemple) et la nature des activités délocalisées (certains types de services ou la production de biens, par exemple). Mots clés : multinationales, délocalisation, productivité, Canada Multinational enterprises (MNEs) have long been recognized as important pillars of Canada's national economy, accounting for the majority of its exports and an important share of its employment. At the same time, there is a widespread perception that MNEs are less rooted in the local economy and are thus more likely to conduct offshoring. In this study, we investigate the latter claim by combining various Canadian firm-level data sets. We find that MNEs (both Canadian and foreign headquartered) are indeed more likely to offshore but suggest that it is not necessarily because they are less rooted in the Canadian economy. We also show different associations between offshoring and firm characteristics (including productivity) depending on the type of offshoring (e.g., intrafirm or interfirm offshoring) and the type of business activity offshored (e.g., certain types of service vs. goods production).

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The Economics of FDI: A Canadian Perspective

Cited by 6 publications

References 25 publications

Investing abroad and investing at home: complements or substitutes?

Investing abroad and investing at home: complements or substitutes?

Canadian FDI in a post COVID-19 world: have we reached the tipping point?

Multinationals and Offshoring: Firm-Level Evidence from Canada

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