F2 - International Factor Movements and International Business

• June 8, 2017

  Canada’s International Investment Position: Benefits and Potential Vulnerabilities

  Financial System Review - June 2017 Gabriel Bruneau, Maxime Leboeuf, Guillaume Nolin

  While greater global financial integration is beneficial, the authors discuss how foreign capital inflows can also facilitate the buildup of domestic vulnerabilities and potentially lead to destabilizing reversals. Canada’s current international investment position is typical of advanced economies and will likely continue to act as an economic stabilizer. However, the growth and composition of Canada’s international investment position warrant continued monitoring.

  Content Type(s): Publications, Financial System Review articles Topic(s): Balance of payments and components, Financial stability, International financial markets JEL Code(s): F, F2, F21, F3, F32, F34, F36, F4, F6

• Expropriation Risk and FDI in Developing Countries: Does Return of Capital Dominate Return on Capital?

  Staff Working Paper 2017-9 M. Akhtaruzzaman, Nathan Berg, Christopher Hajzler

  Previously reported effects of institutional quality and political risks on foreign direct investment (FDI) are mixed and, therefore, difficult to interpret. We present empirical evidence suggesting a relatively clear, statistically robust, and intuitive characterization.

  Content Type(s): Staff research, Staff working papers Topic(s): Development economics, International financial markets JEL Code(s): D, D2, D23, F, F2, F21, F23

• Government Corruption and Foreign Direct Investment Under the Threat of Expropriation

  Staff Working Paper 2016-13 Christopher Hajzler, Jonathan Rosborough

  Foreign investment is often constrained by two forms of political risk: expropriation and corruption. We examine the role of government corruption in foreign direct investment (FDI) when contracts are not fully transparent and investors face the threat of expropriation.

  Content Type(s): Staff research, Staff working papers Topic(s): Development economics, Economic models, International topics JEL Code(s): F, F2, F21, F23, F3, F34

• The Dynamics of Capital Flow Episodes

  Staff Working Paper 2016-9 Christian Friedrich, Pierre Guérin

  This paper proposes a novel methodology for identifying episodes of strong capital flows based on a regime-switching model. In comparison with the existing literature, a key advantage of our methodology is to estimate capital flow regimes without the need for context- and sample-specific assumptions.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, International financial markets, International topics, Monetary policy and uncertainty JEL Code(s): F, F2, F21, F3, F32, G, G1, G11

• Why Do Canadian Firms Invest and Operate Abroad? Implications for Canadian Exports

  Staff Discussion Paper 2014-7 Martin Coiteux, Patrick Rizzetto, Lena Suchanek, Jane Voll

  Canadian foreign direct investment and sales of Canadian multinational firms’ operations abroad, particularly in the manufacturing industry and in the United States, have accelerated sharply over the past decade.

  Content Type(s): Staff research, Staff discussion papers Topic(s): International topics, Recent economic and financial developments JEL Code(s): F, F1, F10, F2, F21, F23, F4, F41
• November 13, 2014

  Firm Strategy, Competitiveness and Productivity: The Case for Canada

  Bank of Canada Review - Autumn 2014 Lori Rennison, Farid Novin, Matthieu Verstraete

  At a time when the Bank is expecting a rotation of demand toward exports and investment, and transformative global trends are placing increasing emphasis on innovation, technology and organizational learning, an understanding of the competitiveness strategies of Canadian firms and the factors affecting them has become particularly relevant. This article summarizes findings from a Bank of Canada survey of 151 firms designed to extract signals on elements of firm strategy and organizational capital in order to help inform the macroeconomic outlook.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Business fluctuations and cycles, Monetary policy and uncertainty, Potential output, Productivity JEL Code(s): D, D2, D23, D24, E, E2, E22, F, F2, F20, L, L1, L10, L2, L20, M, M1, M10, O, O3, O31, O4, O47

• Fire-Sale FDI or Business as Usual?

  Staff Working Paper 2013-17 Ron Alquist, Rahul Mukherjee, Linda Tesar

  Using a new data set, we examine the characteristics and dynamics of cross-border mergers and acquisitions during emerging-market financial crises, that is, so-called “fire-sale FDI.” Our findings shed fresh light on whether the transactions undertaken during crisis periods differ in fundamental ways from those undertaken during more tranquil periods.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, International financial markets, International topics JEL Code(s): F, F2, F21, G, G0, G01, G3, G34

• Composition of International Capital Flows: A Survey

  Staff Working Paper 2010-33 Koralai Kirabaeva, Assaf Razin

  We survey several key mechanisms that explain the composition of international capital flows: foreign direct investment, foreign portfolio investment and debt flows (bank loans and bonds). In particular, we focus on the following market frictions: asymmetric information in capital markets and exposure to liquidity shocks.

  Content Type(s): Staff research, Staff working papers Topic(s): International topics JEL Code(s): D, D8, D82, F, F2, F21, F3, F34

• Identifying Asymmetric Comovements of International Stock Market Returns

  Staff Working Paper 2010-21 Fuchun Li

  Based on a new approach for measuring the comovements between stock market returns, we provide a nonparametric test for asymmetric comovements in the sense that stock market downturns will lead to stronger comovements than market upturns.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial stability, Financial system regulation and policies, International topics JEL Code(s): C, C4, C49, F, F2, F21, G, G1, G15, G19

• Futures Markets, Oil Prices and the Intertemporal Approach to the Current Account

  Staff Working Paper 2008-48 Elif Arbatli

  The intertemporal approach to the current account suggests modeling movements in the current account in a forward-looking, dynamic framework. In this framework, the current account reflects consumption smoothing of agents that lend and borrow from the rest of the world in the face of transitory shocks to income.

  Content Type(s): Staff research, Staff working papers Topic(s): Balance of payments and components JEL Code(s): C, C2, C22, F, F2, F21, F3, F32, G, G1, G13