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8 Results

Market Size and Entry in International Trade: Product Versus Firm Fixed Costs

Staff Working Paper 2018-43 Walter Steingress
This paper develops a theoretical framework to infer the nature of fixed costs from the relationship between entry patterns in international markets and destination market size. If fixed costs are at the firm level, firms take advantage of an intrafirm spillover by expanding firm-level product range (scope).

Does Outward Foreign Investment Matter for Canadian Productivity? Evidence from Greenfield Investments

Staff Working Paper 2018-31 Naveen Rai, Lena Suchanek, Maria Bernier
This paper seeks to understand how outward foreign direct investment (FDI) affects the productivity of Canadian firms. We estimate the impact of outward greenfield investment on measures of firm-level productivity using FDI data from roughly 2,000 Canadian firms and more than 4,000 outward FDI projects over the 2003–14 period.
Content Type(s): Staff research, Staff working papers Topic(s): Firm dynamics, Productivity JEL Code(s): D, D2, D24, F, F2, F21, F23

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.

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.

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.

Exporting and FDI with Endogenous Productivity

Staff Working Paper 2007-14 Oana Secrieru, Marianne Vigneault
This paper provides an analysis of how a firm’s decision to serve a foreign market by exporting or by engaging in foreign direct investment (FDI) affects firm productivity, when productivity is endogeneous as a function of training. The main result of our paper is that, with endogeneous productivity, exporting results in lower productivity than does FDI, but exporting may result in higher or lower employment and output than does FDI.