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Assessing Canada's Ability to Compete for Foreign Direct Investment

Author

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  • Andrew Sharpe

    ()

  • Meghna Banerjee

Abstract

The main purpose of this report is to assess Canada’s performance in attracting foreign direct investment inflows. The study reviews the literature on the benefits of FDI, analyses global and Canadian trends in FDI, identifies various factors affecting the inflow of FDI, and details how Canada ranks relative to other major OECD countries on the most influential factors. Canada’s share of world FDI has fallen markedly since 1980. The report finds that this development reflects the opening of other countries to FDI rather than a hostile climate for FDI in this country. Indeed, there is no one factor that can be identified as seriously impeding the flow of FDI to Canada. The report identifies a number of areas where Canada can potentially improve its attractiveness to FDI, including possible changes to FDI regulation, a more competitive tax regime, better infrastructure, and certain improvements in the human capital area.

Suggested Citation

  • Andrew Sharpe & Meghna Banerjee, 2008. "Assessing Canada's Ability to Compete for Foreign Direct Investment," CSLS Research Reports 2008-04, Centre for the Study of Living Standards.
  • Handle: RePEc:sls:resrep:0804
    as

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    File URL: http://www.csls.ca/reports/csls2008-4.pdf
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    References listed on IDEAS

    as
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    3. J. Bradford DeLong & Lawrence H. Summers, 1992. "Equipment Investment and Economic Growth: How Strong Is the Nexus?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 157-212.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Foreign Direct Investment; Business climate; taxation; infrastructure; human capital;

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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