Jump to ContentJump to Main Navigation
Show Summary Details

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

4 Issues per year


IMPACT FACTOR 2015: 0.250
5-year IMPACT FACTOR: 0.825

SCImago Journal Rank (SJR) 2015: 0.501
Source Normalized Impact per Paper (SNIP) 2015: 0.418
Impact per Publication (IPP) 2015: 0.455

Online
ISSN
1935-1682
See all formats and pricing
Volume 10, Issue 1 (Aug 2010)

North American Integration and Canadian Foreign Direct Investment

Andreas Waldkirch
  • 1Colby College,
/ Ayça Tekin-Koru
  • 2Oregon State University,
Published Online: 2010-08-12 | DOI: https://doi.org/10.2202/1935-1682.2255

Abstract

We investigate how economic integration in North America has altered the pattern of foreign direct investment (FDI) to and from Canada. The theoretical analysis suggests that while the Canadian-U.S. free trade agreement should generate less FDI, the addition of Mexico in the North American Free Trade Agreement (NAFTA) produces the opposite effect. The fall in trade costs results in investment diversion from the U.S. and Canada, yet lower fixed costs may increase FDI even in those countries via an increased incentive to locate production facilities abroad rather than only domestically. Using a difference-in-differences estimator, we find that U.S. FDI in Canada as well as Canadian FDI in the U.S. have expanded disproportionately since NAFTA, suggesting that the latter effect dominates.

Keywords: FDI; multinationals; NAFTA; Canada

About the article

Published Online: 2010-08-12


Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, DOI: https://doi.org/10.2202/1935-1682.2255. Export Citation

Comments (0)

Please log in or register to comment.
Log in