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The Economics of FDI: A Canadian Perspective

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  • Someshwar Rao

    ()
    (Productivity and Competitiveness Analysis Directorate (PCA), Industry Canada)

  • Malick Souare
  • Weimin Wang

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.

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Bibliographic Info

Article provided by Ottawa United Learning Academy in its journal Transnational Corporations Review.

Volume (Year): 1 (2009)
Issue (Month): 4 (December)
Pages: 28-41

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Handle: RePEc:oul:tncr09:v:1:y:2009:i:4:p:28-41

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

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