| Author/Presenter |
Madanmohan Ghosh (Industry Canada) |
| Co-author |
Weimin Wang (Industry Canada) |
| Title |
Do Economic Size and Growth Matter for FDI and Exports? A Comparison of the Canada and US Experiences with Special Reference to China and India |
| Abstract |
Do growing and large economies attract more foreign direct investment (FDI)? Does China and India exert any significant influence on Canadian export and investment flows? This paper compares the performance of Canadian exporters and investors vis-à-vis those in the US, concerning market opportunities abroad. The analysis uses a gravity model approach involving panel data, for Canada and the US. Pooled estimation technique with Period SUR standard errors & covariance is used. Preliminary results suggest significant differences in the pattern of U.S. and Canadian FDI outflows. First, while both Canadian and U.S. investors tend to investment more in the large economies, the elasticity of FDI outflows with respect to GDP is higher for the U.S. compared to Canada. Second, the U.S. investors tend to invest more in the growing economies but the Canadian investors are indifferent with respect to growth. It appears that Canadian investors might not be fully exploiting investment opportunities, due in part because of a mismatch in the areas where investment opportunities are available and areas in which Canadians have comparative advantage. |
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