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Bilateral foreign direct investment in forest industry between the U.S. and Canada

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  • Nagubadi, Rao V.
  • Zhang, Daowei

Abstract

In this study we examine the trends and various factors influencing bilateral foreign direct investment (FDI) in the U.S. and Canadian forest industry between 1989 and 2008. Using panel data analysis methods, we find that bilateral FDI is positively influenced by depreciation of host country's real exchange rates and exchange rate volatility, and home country's forest product imports and exports and round wood production, and negatively by home country's GDP, current outward FDI position in the rest of the world, and current domestic capital expenditure has no effect on the FDI in the forest industry. These results imply that both imports and exports are complementary to outward FDI and that bilateral FDI is a substitute of FDI to the rest of the word.

Suggested Citation

  • Nagubadi, Rao V. & Zhang, Daowei, 2011. "Bilateral foreign direct investment in forest industry between the U.S. and Canada," Forest Policy and Economics, Elsevier, vol. 13(5), pages 338-344, June.
    • Handle: RePEc:eee:forpol:v:13:y:2011:i:5:p:338-344
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    Cited by:

    1. Martin Coiteux & Patrick Rizzetto & Lena Suchanek & Jane Voll, 2014. "Why Do Canadian Firms Invest and Operate Abroad? Implications for Canadian Exports," Discussion Papers 14-7, Bank of Canada.
    2. Das, Joy & Tanger, Shaun, "undated". "Flow of FDI in Softwood Lumber Industry from Canada to the USA: A Study of the Pine Beetle’s Influence on Economic Decision-Making in the North American Wood Products Sector," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259973, Agricultural and Applied Economics Association.
    3. Lal, Madan & Kumar, Satish & Pandey, Dharen Kumar & Rai, Varun Kumar & Lim, Weng Marc, 2023. "Exchange rate volatility and international trade," Journal of Business Research, Elsevier, vol. 167(C).
    4. Mei Ling Wang & Si Lu Pang & Feng Wang & Xin Guo & Zheng Xia He, 2021. "Dynamic interaction between outward foreign direct investment and home country industrial upgrading: Regional differences in China," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2293-2317, December.
    5. Zhang, Yijing & Toppinen, Anne & Uusivuori, Jussi, 2014. "Internationalization of the forest products industry: A synthesis of literature and implications for future research," Forest Policy and Economics, Elsevier, vol. 38(C), pages 8-16.

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