IDEAS home Printed from https://ideas.repec.org/p/ekd/000238/23800043.html
   My bibliography  Save this paper

Liberalizing Foreign Direct Investment Restrictions in Canada: A Multi-Country Computable General Equilibrium Analysis

Author

Listed:
  • Patrick GEORGES
  • Marcel MERETTE
  • Yazid DISSOU

Abstract

This paper develops a multi-country multi-sector static general equilibrium model to assess the economic effects of liberalizing FDI restrictions in Canada, either unilaterally, bilaterally (with the US), or multilaterally. From a strict economic point of view, removing barriers to inward FDI could reap great benefits to all regions of the world, and in particular to the ones in which the restrictions are initially severe. Our simulation results show that the benefits of fewer restrictions on FDI stem mainly from a better resource reallocation across the world and an increased capital stock in foreign-owned firms accompanied by a positive spillover effect on total factor productivity. Up to 80% of the welfare increase resulting from liberalizing FDI restrictions is due to increased total factor productivity.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Patrick GEORGES & Marcel MERETTE & Yazid DISSOU, 2008. "Liberalizing Foreign Direct Investment Restrictions in Canada: A Multi-Country Computable General Equilibrium Analysis," EcoMod2008 23800043, EcoMod.
    • Handle: RePEc:ekd:000238:23800043
    as

    Download full text from publisher

    File URL: http://www.ecomod.net/sites/default/files/document-conference/ecomod2008/555.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
    2. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    3. Philippa Dee & Kevin Hanslow, 2013. "Multilateral Liberalization of Services Trade," World Scientific Book Chapters, in: Services Trade Reform Making Sense of It, chapter 4, pages 69-95, World Scientific Publishing Co. Pte. Ltd..
    4. Baldwin, John R. & Hanel, Peter, 2000. "Multinationals and the Canadian Innovation Process," Analytical Studies Branch Research Paper Series 2000151e, Statistics Canada, Analytical Studies Branch.
    5. James R. MARKUSEN, 2021. "Factor Movements And Commodity Trade As Complements," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 15, pages 325-340, World Scientific Publishing Co. Pte. Ltd..
    6. Robert E. Lipsey, 2000. "Interpreting Developed Countries' Foreign Direct Investment," NBER Working Papers 7810, National Bureau of Economic Research, Inc.
    7. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(1), pages 210-211, January.
    8. Globerman, S. & Shapiro, D., 1998. "Canadian Government Policies Toward Inward Foreign Direct Investment," Gouvernement du Canada - Industrial Organization 24, Gouvernement du Canada - Industry Canada.
    9. Surendra, G. & Gu, W. & Lee, F.C., 1999. "Foreign Direct Investment and Productivity Growth: The Canadian Host-Country Experience," Gouvernement du Canada - Industrial Organization 30, Gouvernement du Canada - Industry Canada.
    10. Markusen, James R & Wigle, Randall M, 1989. "Nash Equilibrium Tariffs for the United States and Canada: The Roles of Country Size, Scale Economies, and Capital Mobility," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 368-386, April.
    11. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(4), pages 668-669, October.
    12. Edward M. Graham & Paul Krugman, 1995. "Foreign Direct Investment in the United States, 3rd Edition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 52, October.
    13. Stephen S. Golub, 2003. "Measures of Restrictions on Inward Foreign Direct Investment for OECD Countries," OECD Economic Studies, OECD Publishing, vol. 2003(1), pages 85-116.
    14. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    15. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(2), pages 337-338, April.
    16. Anonymous, 1960. "International Monetary Fund," International Organization, Cambridge University Press, vol. 14(3), pages 468-472, January.
    17. Arbenser, Lawrence, 2004. "A General Equilibrium Analysis of the Impact of Inward FDI on Ghana: The Role of Complementary Policies," Working Paper Series 18829, Humboldt University Berlin, Department of Agricultural Economics.
    18. Baldwin, John R. Gu, Wulong, 2005. "Global Links: Multinationals, Foreign Ownership and Productivity Growth in Canadian Manufacturing," The Canadian Economy in Transition 2005009e, Statistics Canada, Economic Analysis Division.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick Georges & Marcel Mérette & Qi Zhang, 2012. "Toward a North American Security Perimeter? Assessing the Trade and FDI Impacts of Liberalizing 9/11 Security Measures," Working Papers 1204E, University of Ottawa, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark Horridge & Glyn Wittwer, 2008. "Creating and managing an impossibly large CGE database that is up-to-date," Centre of Policy Studies/IMPACT Centre Working Papers g-175, Victoria University, Centre of Policy Studies/IMPACT Centre.
    2. Henk L. M. Kox & Hugo Rojas‐Romagosa, 2020. "How trade and investment agreements affect bilateral foreign direct investment: Results from a structural gravity model," The World Economy, Wiley Blackwell, vol. 43(12), December.
    3. Limam Ould Mohamed Mahmoud, 2015. "Consumer price index and economic growth: A case study of Mauritania 1990 - 2013," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 5(2), pages 16-23, February.
    4. Gennaro Zezza & Michalis Nikiforos, 2017. "Stock-flow Consistent Macroeconomic Models: A Survey," EcoMod2017 10762, EcoMod.
    5. Akin Serife Nuray, 2012. "Immigration, Fiscal Policy, and Welfare in an Aging Population," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-45, July.
    6. Mr. Andrea Bubula & Ms. Inci Ötker, 2002. "The Evolution of Exchange Rate Regimes Since 1990: Evidence From De Facto Policies," IMF Working Papers 2002/155, International Monetary Fund.
    7. Manuel Jr. Pastor, 1988. "Ascenso y caída de la heterodoxia peruana: un modelo simple de del nuevo estructuralismo," Apuntes. Revista de ciencias sociales, Fondo Editorial, Universidad del Pacífico, vol. 15(23), pages 41-71.
    8. Tochukwu Timothy Okoli & Ajibola Rhoda Oluwafisayomi, 2019. "Investigating the Banking Sector Development Transmission Mechanism of Financial Development to Growth: Evidence from Sub-Saharan Africa (SSA)," Journal of Economics and Behavioral Studies, AMH International, vol. 11(2), pages 120-131.
    9. Kose, M. Ayhan & Sugawara, Naotaka & Terrones, Marco E., 2020. "Global Recessions," MPRA Paper 98608, University Library of Munich, Germany.
    10. Mohelsky, Lukas, 2010. "Eastern Europe shifts second gear," MPRA Paper 33148, University Library of Munich, Germany.
    11. Mar Delgado-Téllez & Esther Gordo & Iván Kataryniuk & Javier J. Pérez, 2022. "The decline in public investment: ``social dominance’’ or too-rigid fiscal rules?," Applied Economics, Taylor & Francis Journals, vol. 54(10), pages 1123-1136, February.
    12. André Roncaglia De Carvalho & - André M. Marques, 2018. "Economic Development And Inflation: A Theoretical And Empirical Analysis," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 41, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    13. Ms. Dalia S Hakura, 2007. "Output Volatility and Large Output Drops in Emerging Market and Developing Countries," IMF Working Papers 2007/114, International Monetary Fund.
    14. Richard J. Cebula, 2014. "An exploratory analysis of the impact of budget deficits and other factors on the ex post real interest rate yield on tax-free municipal bonds in the United States," Applied Financial Economics, Taylor & Francis Journals, vol. 24(19), pages 1297-1302, October.
    15. Victor Argy & Erich SpitÄller, 1980. "The joint determination of changes in output and prices in the seven main industrial countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(1), pages 87-113, March.
    16. Maxwell J. Fry, 1981. "Inflation and economic growth in Pacific Basin developing economies," Economic Review, Federal Reserve Bank of San Francisco, issue Fall, pages 8-18.
    17. Michael D. Bordo, 1993. "The gold standard, Bretton Woods and other monetary regimes: a historical appraisal," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 123-191.
    18. Gomes, Pedro & Pouget, Francois, 2008. "Corporate tax competition and the decline of public investment," Working Paper Series 928, European Central Bank.
    19. Nicholas Awuse & Patrick Tandoh-Offin, 2014. "A Quantitative and Theoretical Analysis of Ghana's Internal Migration, Economic Growth and poverty Reduction: A Disaggregated Approach, from 1980 to 2012," Business and Economic Research, Macrothink Institute, vol. 4(1), pages 14-22, June.
    20. Nitzan, Jonathan, 2001. "Regimes of Differential Accumulation: Mergers, Stagflation and the Logic of Globalization," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 8(2), pages 226-274.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ekd:000238:23800043. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Theresa Leary (email available below). General contact details of provider: https://edirc.repec.org/data/ecomoea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.