Canada and U.S. Outward FDI and Exports_Are China and India Special

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国际生产这种理论——约翰邓宁

The determinants of MNE activity : the OLI paradigm revisited
Some changes have happened
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The mushrooming of cooperative relationships and networks The clustering of high value-added activities The growing importance of relational assets of firms and countries in economic activity
• Content: the firms to own and control foreign value-adding facilities must possess some kind of innovatory, cost, financial or marketing advantages – specific to their ownership.
Incorporating Institutions into the OLI Paradigm
Ownership-specific Advantages
Locational Factors
Internalization Factors
Oa Oi Ot
Institutions are Subsumed within the Oi
Ownership advantages
Necessary prerequisite primary motivation
Ability of foreign business activity

Outward_FDI

Outward FDI and economic growthDierk HerzerGerman Institute for Economic Research (DIW),Berlin,Germany andUniversity of Wuppertal,Wuppertal,GermanyAbstractPurpose –The purpose of this paper is to examine the impact of outward foreign direct investment (FDI)on economic growth.Design/methodology/approach –Two econometric approaches are used:cross-country regressions for a sample of 50countries and time-series estimators for the USA.Findings –Both approaches tell the same story:outward FDI is positively associated with growth.This ﬁnding is robust to several model speciﬁcations,potential outliers,and different estimation techniques.In addition,Granger-causality tests for the USA indicate that causality is bidirectional,suggesting that increased outward FDI is both a cause and a consequence of increased domestic output.Originality/value –Previous studies have primarily examined the ﬁrm-and industry-level effects of outward FDI –for example,on domestic investment,employment,and productivity.This paper,in contrast,deals with the effects of aggregate outward FDI on the economy as a whole.Keywords Economic growth,International investments,National economy,EconometricsPaper type Research paper 1.Introduction How does outward foreign direct investment (FDI)affect domestic economic activity?This question has been the subject of extensive public policy debate in the industrialized world.Opponents of outward FDI argue that outward investment substitutes foreign for domestic production when ﬁrms shift parts of the production abroad.Accordingly,outward investment inevitably reduces domestic investment,employment,productivity,and thereby economic growth.Proponents of outward investment,in contrast,point out that outward FDI enables ﬁrms to enter new markets,to import intermediate goods from foreign afﬁliates at lower costs,and to access foreign technology.From this point of view,the entire domestic economy beneﬁts from outward FDI due to the increased competitiveness of the investing companies and associated productivity spillovers to local ﬁrms.Unfortunately,empirical studies do not provide a clear picture of whether and how domestic economic activity is inﬂuenced by outward FDI.Stevens and Lipsey (1992),for example,analyze the domestic investment behavior of seven US multinational companies.Their results suggest that that outward investment and domestic investment are substitutes.Desai et al.(2005),on the other hand,using time-series data for the US ﬁrms,ﬁnd a positive relationship between domestic and foreign investment.This ﬁnding,in turn,is consistent with a study by Lipsey (1994),who reports a positive correlation between foreign production and domesticThe current issue and full text archive of this journal is available at/0144-3585.htmJEL classiﬁcation –F43,F21,C21,C22The author would like to thank an anonymous referee for helpful comments.JES37,5476Received 2January 2009Accepted 15July 2009Journal of Economic StudiesVol.37No.5,2010pp.476-494q Emerald Group Publishing Limited0144-3585DOI 10.1108/01443581011075424employment levels by the USﬁrms.In contrast,the results by Blomstro¨m et al.(1997) suggest that in the US multinationalﬁrms,higher foreign production is associated with lower employment at home,whereas Swedish parent companies employ more labor at home when they produce more abroad.Finally,Braconier et al.(2001)examine the related question of whether domestic productivity is affected by outward ing ﬁrm-and industry-level panel data for Sweden,theyﬁnd no evidence of FDI-induced productivity gains.This,however,is in contrast to the results by Barba Navaretti and Castellani(2004),whoﬁnd that in Italianﬁrms,outward investment increases domestic output and productivity growth[1].Admittedly,a common feature of all these studies is that they are based onﬁrm-or industry-level data for manufacturing.Since,however,services have emerged as the leading industry for outward FDI,the large majority of outward investment is excluded from the analysis a priori.Furthermore,data restricted to individual investingﬁrms or industries are by deﬁnition not able to capture the effects of outward investment on the economy as whole.However,resolving the policy debate about the effects of outward FDI on domestic economic activity requires clarifying the overall effects of outward FDI–in particular,the effects of aggregate outward FDI on economic growth.This paper examines whether aggregate outward FDI inﬂuences growth. To our knowledge,this is theﬁrst attempt to examine the growth impact of outward FDI.Methodologically,the paper uses two econometric approaches for this purpose:(1)cross-country regressions;and(2)time-series estimators.Cross-country growth regressions may suffer from heterogeneity and endogeneity problems,whereas time-series regressions for an individual country do not provide a strong basis for general conclusions.Hence,we have chosen to use both approaches. More speciﬁcally,we estimate cross-country growth regressions for a sample of 50countries.This analysis is complemented by a cointegration and causality analysis on the basis of macroeconomic time-series data for the US.To preview the main results of the paper,weﬁnd that outward FDI has a positive impact on economic growth. Interestingly,the time-series evidence for the US suggests a positive two-way relationship: thus,increased outward FDI causes economic growth,and economic growth causes increased outward FDI.The rest of the paper is organized as follows.Section2discusses the potential growth effects of outward FDI in more detail.Section3presents the results of the cross-country regressions.Section4contains theﬁndings of the time-series analysis. Section5concludes.2.Outward FDI and economic growthThis section is dedicated to the theoretical background relevant for assessing the growth effects of outward FDI.We begin with a discussion of the potential effects of foreign investment activities on the domestic production activities of multinationalﬁrms.Finally, we consider the possible impact of outward FDI on the domestic economy as a whole.2.1Outward FDI and multinationalﬁrmsWe start by considering a multinationalﬁrm producing worldwide output with the function:Outward FDI and economicgrowth477Q ðD ;F ;u Þ;ð1Þin which D is the level of domestic input,F denotes foreign input,and u is vector of all other factors that inﬂuence Q .Assuming that domestic input production is a function of domestic capital,D (K d ),while foreign input production is a function of foreign capital,F (K f ),the ﬁrst-order condition that characterizes the ﬁrm’s proﬁt-maximizingchoice of domestic inputs is:›Q ½D ðK d Þ;F ðK f Þ;u ›D ðK d Þ¼l ;ð2Þin which l is the input cost of the ﬁrm.From this equation,it can be easily seen that foreign and domestic production of the multinational ﬁrm can be related either through the cost of inputs and thus the cost of capital (if l is somehow a function of F ),or through the production process (if ›2Q ½D ðK d Þ;F ðK f Þ;u =›D ðK d Þ›F ðK f Þis nonzero).In the following,we discuss these two types of interdependence in more detail[2].2.1.1Interactions through the ﬁnancial side .Interactions between foreign and domestic activities operating through the ﬁnancial side of the multinational ﬁrm occur in the particular situation of ﬁxed ﬁnancial resources.This scenario is characterized by investments in different locations competing for scarce funds due to increasing costs of external ﬁnancing.As a consequence,the decision to invest limited resources abroad inevitably reduces the likelihood of concurrent investments at home,so that outward FDI necessarily substitutes foreign production activities for domestic production activities.However,recent evidence suggests that the scenario of ﬁxed ﬁnancial resources is not typical for multinational enterprises.Desai et al.(2004),for example,analyze how multinationals capitalize afﬁliates around the world and ﬁnd that multinational afﬁliates substitute internal borrowing for costly external ﬁnance stemming from adverse capital market conditions.Similarly,Desai et al.(2008)demonstrate that multinationals receive equity capital from their parent companies to ﬁnance proﬁtable investment opportunities during currency crises.Hence,as argued by Desai et al.(2005),possible interactions between domestic and foreign activities are less likely to occur through the ﬁnancial side,but the production process acts as the main source of interdependence.2.1.2Interactions through the production side .There are several ways in which outward FDI can affect domestic production through production interdependencies,each of which depends on the multinational ﬁrm’s investment motive and hence on the respective investment type.In the literature,three types of investment are usually distinguished:horizontal FDI,vertical FDI,and technology-sourcing FDI.Horizontal or market-seeking FDI is motivated by market access.It occurs when a ﬁrm decides to serve foreign markets through local production rather than exports,and hence to produce the same product or service in multiple countries.As a result of such investment activities,domestic production decreases to the extent that foreign output generated by this horizontal FDI substitutes for domestically produced exports.However,given the fact that there is rarely a pure case of horizontal production,this reduction of domestic output is likely to be only short term.Services related to ﬁrm-speciﬁc assets are generally produced at company headquarters and supplied to foreign plants even if the same ﬁnal goods are produced in both home and foreign countries.Accordingly,multinational ﬁrms typically combine home production withJES 37,5478foreign production to reduce costs and to raise the returns to domestic production,which in turn stimulates domestic factor demand and domestic output(Desai et al.,2005). Thus,the initial export loss in terms ofﬁnished goods can be more than compensated for by an increase in the export of intermediate goods and services to the afﬁliate (Kokko,2006).Furthermore,and perhaps more importantly,in the long run,horizontal FDI allows the multinationalﬁrm to raise its competitiveness by accessing new markets or successfully penetrating already existing markets.This generally results in increased home market productivity and consequently in increased domestic production.Vertical FDI,in contrast,is driven by international factor-price differences.It takes place whenﬁrms fragment their production process internationally,locating each stage of production in the country where it can be done at the lowest cost.Such relocations lead to reductions in home output,at least in the short run(as with horizontal FDI).However,in the long run,vertical investment may allowﬁrms to import intermediate goods from foreign afﬁliates at lower prices and/or to produce a greater volume ofﬁnal goods abroad at lower cost,thereby stimulating exports of intermediate used by foreign afﬁliates.Accordingly,the new structure of the production chain is associated with increased efﬁciency.This implies that through vertical outward FDI,ﬁrms are able to improve their competitive position and hence raise domestic output in the long run(Kokko,2006).Only if they fail to increase their competitiveness (e.g.due to market constraints),they will be unable to adjust to the reduction in home market output,implying that horizontal as well as vertical outward FDI will substitute foreign activities for domestic activities even in the long run.Finally,technology-sourcing FDI occurs when aﬁrm intends to copy or to source the foreign technology base by either purchasing foreignﬁrms or establishing R&D facilities in“foreign centers of excellence”.If foreign afﬁliates then acquire new knowledge in terms of technological know-how,management techniques,knowledge of consumer tastes,etc.this can be transferred back to the parent company, which positively affects home country productivity and output growth(Fosfuri and Motta,1999).2.2Outward FDI and the domestic economyIt may be that the above described positive effects accrue not only to the investingﬁrms but also to local producers,thereby beneﬁting the economy as a whole(Blomstro¨m and Kokko,1998).Localﬁrms may,for example,improve their productivity by copying some technology used by foreign investing companies.Similarly,local producers may beneﬁt from the diffusion of new technology through labor turnover.Furthermore,the increased competition stimulated by outward FDI may force domesticﬁrms to use existing technology and resources more efﬁciently.Also,it may be that outward investingﬁrms produce intermediate goods that will become available at lower cost to all home countryﬁrms as a result of outward FDI.Additionally,if outward FDI allows the investingﬁrms to grow larger than would be possible with production in just one country,both the investing companies and their local suppliers may beneﬁt from economies of scale.As a consequence,outward FDI may enable domestic suppliers to move down their learning curves and,hence,to realize substantial productivity gains. Thus,it can be concluded that outward FDI can beneﬁt the domestic economy through positive spillovers to domesticﬁrms,thereby contributing to economic growth.Outward FDI and economicgrowth479However,given that FDI is generally assumed to be an important vehicle for the transfer of technological and business know-how,it also has to be considered that outward FDI is likely to increase the competitiveness of the host economy as well.This may in turn lead to reductions in domestic output when domestic consumers prefer the foreign competitors.Furthermore,the increased competitiveness may allow local ﬁrms in the host country to challenge the foreign ﬁrms and,hence,to capture market sharesfrom the foreign afﬁliates.Thus,outward FDI may enable foreign competitors to attract demand away from domestic or domestically owned ﬁrms,forcing them to reduce their production in the home country (Kokko,2006).Summarizing,it can be said that outward FDI can have substantial effects on domestic output and thus economic growth.However,the net growth effect of outward FDI is theoretically ambiguous and thus becomes an empirical issue.3.Cross-country evidenceIn this section,we use cross-country regressions to examine the association between outward FDI and economic growth.Section 3.1presents the empirical model and the data.Section 3.2discusses the empirical results.The robustness of the results is examined in Section 3.3.3.1The model and the dataFollowing the recent empirical cross-country growth literature in specifying regression equations,we consider a growth regression of the following general form (Barro,2001;Bleaney and Castilleja-Vargas,2007):GYP i ¼a 1þa 2OFDI i þa 3D i þv i ;ð3Þwhere GYP i is the growth rate of output per capita for country i ,OFDI i is outward FDI,D i is a vector of control variables,and a s and v i are coefﬁcients and the usual error term,respectively.The vector of D-variables contains variables that,according to Levine and Renelt (1992)have a robust impact on economic growth.These variables are:the average share of investment in gross domestic product (GDP)(I i ),the log of initial real GDP per capita (ln(YP 0)i ),and the log of initial human capital (ln(S 0)i ).Thus,we regress GYP i on OFDI i ,I i ,ln(YP 0)i ,and ln(S 0)i .This is the basic model,which in the following will be referred to as model 1.In addition,several variables are included step by step to control for other factors associated with economic growth.These variables,which we will refer to as Z -variables,are:the growth rate of exports (X i ),the inﬂation rate (PI i ),the logarithm of life expectancy (ln(L )i ),the ratio of domestic credit to the private sector to GDP (Credit i ),the ratio of government consumption to GDP (Gov i ),and the growth rate of imports (M i ).Data on human capital,measured by the average years of schooling in the total population over age 25,are from the Barro and Lee (2000)data set.All other variables are from the world development indicators (WDI)2006.Note that the FDI variable is represented by the ratio of net FDI ﬂows to GDP,as is common practice in the FDI literature (Alfaro et al.,2004).The availability of outward FDI data limits our sample size to 50countries and the length of the period to 1980-2000.The country composition of the sample is given in the Appendix.JES 37,54803.2Empirical resultsThe estimation results are reported in Table I.As can be seen,in model1,the estimated coefﬁcients on ln(YP0),I,and ln(S0)have the expected signs and are statistically signiﬁcant at least at the5-percent level.Thus,human and physical capital appear to affect output growth,and the negative coefﬁcient on ln(YP0)implies that per capita incomes in different countries tend to converge over time conditional on the values of the other variables[3].Interestingly,the results show a statistically signiﬁcant positive effect of outward FDI on economic growth.The estimated coefﬁcient in model1implies that an increase in the OFDI-to-GDP ratio by1percentage point would increase the growth rate by0.293percent per year.Observe that this coefﬁcient is statistically signiﬁcant and of similar magnitude across all estimated models,suggesting that the growth effect of outward FDI is robust to the inclusion of other variables.3.3RobustnessIn order to examine whether the OFDI coefﬁcient is also robust to changes in the conditioning information set,we apply the extreme bounds approach(EBA)suggested by Leamer(1983)and Levine and Renelt(1992).This approach involves including all possible linear combinations of up to three of the Z-variables in model1and identifying the highest and the lowest value of the coefﬁcient on OFDI i that cannot be rejected at the 5-percent signiﬁcance level.Accordingly,the extreme upper bound is deﬁned by the group of Z-variables that produces the maximum value of the estimated coefﬁcient on OFDI i plus two standard deviations,while the extreme lower bound is deﬁned by the group of Z-variables that produces the minimum value in terms of the estimated coefﬁcient minus two standard deviations.Following Levine and Renelt(1992),we refer to the result as robust if the coefﬁcient on OFDI i remains signiﬁcant and of the same sign at the extreme bounds.Table II presents the EBA results.At the lower bound,the coefﬁcient on OFDI i is0.205with a t-statistic of2.046implying that the relationship between outward FDI and economic growth can be regarded as robust.However,we must be cautious in drawing conclusions from the EBA.As found by Hoover and Perez(2004),robustness in the sense of Leamer(1983)is neither necessary nor sufﬁcient for a regressor to belong to the“true”data generating process.In order to investigate whether a variable is in fact an important regressor for explaining cross-country growth patterns,Hoover and Perez(2004)suggest a general-to-speciﬁc modeling approach.This approach,which has been used almost exclusively in time-series contexts,is based on estimating a general speciﬁcation in which all variables are included as regressors.Variables with insigniﬁcant coefﬁcients are then eliminated sequentially according to the lowest t-values until the remaining variables are signiﬁcant at the5-percent level.After removal of each variable,a series of speciﬁcation tests is performed.The test battery includes tests for normality of the residuals, functional form,and heteroscedasticity.In our case,the general speciﬁcation is model1plus the Z-variables(model7in Table I).Successively eliminating the variables with the lowest t-values results in the following speciﬁcation(t-statistics in parentheses beneath the estimated coefﬁcients): GYP i¼23:689þ0:204OFDI iþ0:125I iþ0:402X ið24:612Þð2:393Þð3:296Þð7:481Þ;ð4ÞOutward FDIand economicgrowth481M o d e l (1)(2)(3)(4)(5)(6)(7)O F D I 0.293(2.122)0.250(2.513)0.214(2.174)0.213(2.155)0.218(2.218)0.248(2.497)0.242(2.518)I 0.205(3.858)0.127(3.181)0.113(2.856)0.101(2.363)0.090(2.098)0.091(2.138)0.087(2.117)l n (Y P 0)20.860(22.545)20.359(21.410)20.370(21.494)20.489(21.671)20.671(22.081)20.431(21.194)20.118(20.309)l n (Y P S )0.911(2.560)0.318(1.171)0.345(1.305)0.230(0.758)0.087(0.271)0.109(0.344)0.019(0.062)X 0.376(6.567)0.376(6.764)0.370(6.539)0.368(6.570)0.369(6.654)0.500(5.878)P I 20.002(21.897)20.002(21.824)20.001(21.445)20.002(21.764)(21.894)l n (L )1.811(0.773)2.721(1.121)1.889(0.765)2.461(1.065)C r e d i t0.008(1.300)0.008(1.292)0.006(0.028)G o v 20.048(21.411)20.091(22323)M 20.193(21.985) R 20.360.670.690.680.690.700.72N o t e s :A l l r e g r e s s i o n s h a v e b e e n e s t i m a t e d o v e r t h e p e r i o d 1980-2000f o r a s a m p l e o f 50c o u n t r i e s ;a l l r e g r e s s i o n s h a v e a c o n s t a n t t e r m ;t -v a l u e s a r e i n p a r e n t h e s e s ;i n (Y P 0)i s t h e l o g o f r e a l G D P p e r c a p i t a i n 1980;I i s t h e a v e r a g e r a t i o o f i n v e s t m e n t t o G D P ;O F D I i s t h e a v e r a g e r a t i o o f F D I o u t ﬂo w s t o G D P ,ln (S 0)i s t h e l o g o f a v e r a g e y e a r s o f s c h o o l i n g i n p o p u l a t i o n o v e r 25i n 1980;X i s t h e a v e r a g e e x p o r t g r o w t h r a t e ;P I i s t h e a v e r a g e i n ﬂa t i o n r a t e b a s e d o n t h e c o n s u m e r p r i c e i n d e x ;i n (L )i s t h e l o g a r i t h m o f t h e a v e r a g e l i f e e x p e c t a n c y a t b i r t h .C r e d i t i s t h e a v e r a g e r a t i o o f d o m e s t i c c r e d i t t o t h e p r i v a t e se ctorto G D P ;G o v i s t h e a v e r a g e r a t i o o f g o v e r n m e n t c o n s u m p t i o n t o G D P ;M i s t h e a v e r a g e i m p o r t g r o w t h r a t e Table I.Cross-country regressionresults (dependentvariable:average annualper capita growth rate)JES 37,5482R2¼0:67SE ¼0:98JB ¼0:75ð0:69ÞRESET ¼0:43ð0:51ÞHET ¼0:68ð0:66ÞThe numbers in parentheses behind the values of the diagnostic test statistics are the corresponding p -values.JB is the Jarque-Bera test for normality,RESET is the usual test for general nonlinearity and misspeciﬁcation,and HET is the White test for heteroscedasticity.As can be seen,all p -values exceed the conventional signiﬁcance levels.Hence,we conclude that neither obvious nonlinearity or misspeciﬁcation is present,nor that the residuals show any signs of nonnormality or heteroscedasticity.Observe that the general-to-speciﬁc procedure selects investment and export growth as important regressors in explaining cross-country growth differences.This is in line with the results by Hoover and Perez (2004),who also found that investment and openness matters for growth,while human capital and initial income turned out to be insigniﬁcant.In equation (4),the coefﬁcient on OFDI i ,in contrast,is statistically signiﬁcant with a t -statistic of 2.393.Thus,our results strongly suggest that increasing investment abroad by domestic enterprises promotes economic growth in the home country.Finally,to determine whether outliers are responsible for this ﬁnding,we reestimate equation (4)excluding one country at a time from the sample.The estimated t -statistics on OFDI i along with the 5-percent critical values are shown in Figure 1.As can be seen,the results appear robust to the sample choice:the effect of outward investment remains positive and statistically signiﬁcant at the 5-percent level.Figure 1.Estimation with single country excluded from the sample1.92.02.12.22.32.42.52.62.75101520253035404550t -statistics of the coefficient on OFDI 5 percent critical value Coefﬁcients on OFDI it -statistics Z-variables Result High0.330 2.799Credit ,Gov ,X Robust Model 10.293 2.122Low 0.205 2.046X ,PI ,M Note:Dependent variable:average annual per capita growth rateTable II.Cross-country regressionresults:extreme boundsanalysis Outward FDI and economic growth 483Nevertheless,we have to be cautious in interpreting the results.A well-known problem with cross-country studies is the implicit assumption of a common economic structure across countries.In fact,production technologies,institutions,and policies differ substantially between countries,so that country-speciﬁc omitted variables may lead to misleading cross-country regression results.Moreover,a statistically signiﬁcant positive relationship between outward FDI and economic growth need not necessarilybe the result of a causal growth impact of outward FDI.It is indeed also possible that high economic growth and associated productivity improvements in the home country allow ﬁrms to invest more abroad.Accordingly,the regression results may suffer from serious endogeneity biases.4.Time-series evidenceGiven the problems inherent to cross-country regressions,we reexamine the growth impact of outward FDI by applying cointegration techniques to time-series data for the largest supplier of outward FDI in the world –the USA[4].The analysis proceeds as follows:Section 4.1speciﬁes the empirical model and describes the data.The estimation results are presented in Section 4.2.Section 4.3examines the robustness of the results.4.1The model and the dataFollowing common practice in the time-series literature on economic growth,we consider a long-run relationship of the following bivariate form (Zhang,2001;Basu et al.,2003;Mohammadi et al.,2008):ln Y t ¼c 1þc 2t þc 3ln OFDI þ1t ;ð5Þwhere ln Y t is the natural log of real GDP at time t ,ln OFDI t is the log of the real outward FDI stock,t is a linear time trend (t ¼1,...,T ),and 1t is the usual error term[5].Note that since data on US outward FDI stocks are available,we use the stock rather than the outward FDI ﬂow,as suggested by Zhang (2001).Flows tend to reﬂect only short-run effects,while stocks,due to the accumulation of ﬂows,may capture the long-term effects we are interested in.Data on real GDP (in 2000international dollars)are drawn from the WDI 2006.They are available up to 2004.Data on the US outward FDI stock are obtained from the United Nations Conference on Trade and Development (UNCTAD)FDI database (/templates/Page.asp?IntItemID ¼3277&lang ¼1).Given that UNCTAD reports outward FDI stocks as shares of GDP,we construct a time series for the real outward FDI stock (in 2000international dollars)by multiplying the outward FDI to GDP ratio (drawn from UNCTAD)by the real GDP (from the WDI,2006).Unfortunately,these data are available only from 1980onwards.Thus,our period of analysis covers only 25annual observations from 1980to 2004.In our view,this is sufﬁcient to capture the long-run impact of outward FDI.But it should be stressed that the behavior of the estimators and test statistics we use may be seriously affected by the small size of the available sample.We will deal with this problem by applying small sample corrections whenever possible.Moreover,we have chosen to use a battery of estimation methods to examine the robustness of the results.JES 37,54844.2Empirical results4.2.1Cointegration test.In theﬁrst step,we test for the existence of a long-run or cointegrating relationship between ln Y t and ln OFDI t using the autoregressive distributed lag(ARDL)approach developed by Pesaran et al.(2001)[6].This procedure is applicable irrespective of whether the underlying variables are purely I(0),purely I(1) or mutually cointegrated,and thus avoids the problems associated with pre-testing for unit roots prior to testing for cointegration.The error correction representation of the ARDL model for equation(5)is given byD ln Y t¼b1þb2tþb3ln Y t21þb4ln OFDI t21þX ki¼1h i D ln Y t2iþX ki¼0g i D ln OFDI t2iþu t;ð6Þwhere the absence of a cointegrating relationship between ln Y t and ln OFDI t is tested by computing the F-statistic for the null of no cointegration H0:b2¼b3¼b4¼0against the alternative H2:b2–b3–b4–0.Because the F-statistics have a nonstandard distribution and depend on whether the variables are I(0)or I(1), Pesaran et al.(2001)provide two sets of critical values:one assumes that all variables are I(0),the other assumes that all variables are I(1).If the calculated F-statistic falls below the lower bound critical value,then the null of no cointegration cannot be rejected. If,in contrast,the F-statistic lies above the upper bound critical value,then the null hypothesis is rejected.If the F-statistic falls within the critical value bounds,the result is inconclusive;thus,the order of integration must be known before any conclusion can be drawn.Unfortunately,the critical values of Pesaran et al.(2001)are generated based on large sample sizes(500and1,000observations).As a consequence,they tend to over-reject the null hypothesis of no cointegration in favor ofﬁnding cointegration in small samples. To deal with this problem,we also consider the small sample critical value bounds generated by Narayan(2005)with a sample size of30observations.Because all standard lag selection criteria unanimously suggest k¼1,we estimate the ARDL model with one lag.Moreover,an impulse dummy,D82,is included to obtain a well-speciﬁed equation.Obviously,D82captures the effects of the recession in1982-1983 and is1in1982and0elsewhere.The calculated F-statistics,the critical value bounds, and some residual diagnostics are reported in Table III.As can be seen,the diagnostic test statistics suggest that the model is well speciﬁed. The assumption of normally distributed residuals cannot be rejected(JB).The Lagrange multiplier(LM)tests for autocorrelation based on1,3,and5lags,respectively,do not indicate any problems concerning autocorrelated residuals.The model also passes the LM tests for autoregressive conditional heteroscedasticity(ARCH(k))of order k¼1, 2,4,and the RESET test does not suggest nonlinearity or misspeciﬁcation.Furthermore, the CUSUM test and the plot of the recursive residuals shown in Figure2do not indicate any instability of the estimated equation.Consequently,statistically valid inferences can be drawn regarding the cointegration of ln Y t and ln OFDI t:because the calculated F-statistic in Table III signiﬁcantly exceeds the upper bound critical values,the null of no cointegration can be rejected at the1-percent signiﬁcance level.4.2.2Parameter estimation.Having found that ln Y t and ln OFDI t are cointegrated, the next step in our analysis is the estimation of the long-run coefﬁcient on outward FDI.Outward FDI and economicgrowth485。

FDI与技术外溢——印度不同行业评估【外文翻译】

外文翻译原文FDI and Technology Spillover: An Evaluation across Different Clusters in India Material Source:Journal of the Asia Economy Author: Smruti Ranjan Behera The present analysis tries to explore the impact of FDI particularly its technology spillover effect within or between selected industries of Indian manufacturing in different select clusters across four regions in India. To measure the spillover effect of a particular cluster this analysis develops an innovative production function which allows for measuring the inter-cluster technology spillover across different clusters in India. The specification of the production function is to measure the technology spillover across different clusters in India and its inter-cluster spillover analysis with respect to some basic parameter in the model. It accounts for the role of investment climate to measure the spillover effect of a particular cluster in India. The empirical findings reveal that some clusters benefit more from the foreign counterparts due to more technological stock in cluster/region and cluster-specific effect and other intermediate factors. Furthermore, technology spillover intensity in some clusters seems to be strongly affected by geographical location and the better investment climate of these regions.1. Introduction:One of the aims in attracting FDI by developing countries is improvement of regional development. Having firms locate in undeveloped and developed regions provides a direct impact in terms of employment and capital creation given the underutilization of resources prior to the entry, and a potential indirect effect via spillovers to local firms. Multinational firms operating in emerging markets transfer technology to local suppliers to increase their productivity and this transfer generates greater competition and lower prices that benefit the entire economy. The primary motivation of the multinationals to transfer technology to suppliers is to enable higher quality inputs at lower prices. Multinationals could diffuse the technology widely–either by direct transfer to additional firms or by encouraging spillover from the original 2recipient. Wide diffusion of technology would then encourage entry into the supplier market, thereby increasing competition and lowering prices. In fact, themultinational cannot prevent the upstream supplier’s firms also selling to others in the downstream markets. The lower input prices and cheap accessing of labor in developing economies may induce entry and therefore more competition in downstream markets, which lower input prices and therefore more output. Pack and Saggi (2001) show theoretically that, as long as there is not too much entry, profits will rise in both downstream and upstream markets. If so, the new surplus generated from increased productivity and the deadweight loss reduced from increased competition will be split between consumers and producers in a Pareto-improving distribution.Economic geography in an era of global competition involves a paradox. It is widely recognized that changes in technology and competition have diminished many of the traditional roles of location. Resources, capital, technology, and other inputs can be efficiently sourced in the international markets. Local firms can access the immobile inputs via the corporate networks. Thus, it is no longer necessary to locate near large markets to serve them. Governments are loosing their influence over competition to global forces, so it is easy to conclude that location is diminishing in importance. But, how far this hypothesis is correct for the developing economies rather is it hard to reconcile this with competitive reality. In the Competitive Advantage of Nations (Porter, 1990) the microeconomic-based theory of national, state, and local competitiveness in the global economy maintains that regional clusters have a prominent role to play.2. Conceptual Issues:Technology diffusion at the industry level for host-country firms is one of the beneficial impacts of FDI. FDI brings with it new kinds of innovative ideas and benefits like technology transfer, management know-how, exchange of knowledge and export marketing access. Many developing countries are attracting FDI to reduce the technological gap in comparison to the advanced nations, to upgrade their managerial skills and to develop their export markets. Proponents offer three explanations for how technology spillovers occur from multinational to domestic firms. First, local firms may be able to learn the technological know-how from the foreign counterparts. Second, employees may leave multinationals to create or join domestic firms of a particular region. Third, multinational investment may encourage the entry of international trade brokers, accounting firms, consultant companies and other professional services which there after become available to the local firms.Rodrik (1999) in a summary of evidence, states that the local firms enjoy apositive spillover generated by the multinationals firm entry in the same industry. The fruit of technology spillover over in particular regional provinces depend upon a number of factors that are linked to the quality of microeconomic business environment. Some aspect of the business environment include for example, the road system of a cluster, corporate taxes, the legal system of the particular area, local labour market regulation, and credit facilities of the particular clusters. However, these economy-wide (or horizontal) areas are important and represent the binding constraints to competitiveness in developing economies. Capturing the business environment in a location is challenging given the myriad local influences on productivity and productivity growth. This is the main concern for it is hard to believe that such horizontal spillovers are likely. First, the technology gap between the foreign and local firms may often be wide in local markets. Local firms may be lacking the absorptive capacity needed to recognize and adopt the new kind of technology. Further, the degree of competition in the local markets of a particular cluster may vary between the local and foreign firms. Due to differences in the quality, technology and other attributes which occur because exported and domestically consumed goods entail different production methods; this reduces the potential for the technology transfer. Second, multinationals may enact measures to minimize technology leakages to the local competitors. And multinationals with non-secure technology may not enter the market at all if they rely on a technological advantage to sustain rents. In addition, foreign firms pay higher wages to discourage technology leakage through former employees. In fact, because of higher wages, foreign firms may even draw a capable manager away from the local to the foreign firm in a particular province.In constrast, technological benefits to local firms through vertical linkages are much more likely, because foreign firms have incentives to provide technology to local firms/suppliers. Vertical technology transfer could occur through both backward (from buyer to supplier) and forward (from supplier to buyer) linkages. In fact, in the Indian context most of the foreign firms are upgrading their technology and supply their product to local and to foreign markets. So the main focus in the present study is to find out the degree and extent of the forward spillover (horizontal spillover) from suppliers to buyers. That is, we examine empirically the upstream effect of FDI on performance for the improvement of productivity of local suppliers/firms.Multinational firms are transferring their technology to local firms and it will reduce the input costs and increase quality and finally increase the output and profits. Foreign firms have an incentive to transfer the technology to many buyers through thesupply chain in the downstream and upstream markets. In other words, foreign firms cannot prevent its more productive supplier’s firms also selling to the other rival foreign/local firms at lower prices. The lower supply prices may induce entry and increase competition so that the price falls in both the upstream/downstream markets. And overall these actions reduce the cost of production by reducing the deadweight loss from the imperfect competition. Thus, this reduction of the input prices and reduction of the cost not only reduces the deadweight loss but it also improves the benefit to both consumer and producer in the upstream/downstream markets of a particular cluster/regional province.译文FDI与技术外溢——印度不同行业评估资料来源:<<亚洲经济>> 作者：Smruti Ranjan Behera 目前的分析试图探讨印度四个地区的外商直接投资的影响，特别是印度不同选择集群中制造业行业内部和行业之间的技术外溢效应的影响。

fdi英文参考文献

fdi英文参考文献在研究外国直接投资（Foreign Direct Investment，简称FDI）的英文参考文献方面，以下是一些常见的文献推荐：1. Dunning, J. H. (1993). Multinational enterprises and the global economy. Addison-Wesley.这本书是外国直接投资领域的经典之作，由著名学者Dunning撰写。

书中系统地探讨了跨国企业和全球经济之间的关系，对FDI的发展和影响进行了深入研究。

2. Blomström, M., Lipsey, R. E., & Zejan, M. (1994). What explains developing country growth? NBER Working Paper No. 4132.这篇工作论文探讨了发展中国家经济增长的原因，其中包括外国直接投资的影响。

作者通过实证研究，提供了对FDI对发展中国家经济增长的解释。

3. Alfaro, L., Chanda, A., Kalemli-Özcan, S., & Sayek,S. (2004). FDI and economic growth: the role of local financial markets. Journal of International Economics,64(1), 89-112.这篇文章研究了外国直接投资和经济增长之间的关系，并关注了当地金融市场的作用。

作者通过分析多个国家的数据，得出了FDI对经济增长的积极影响，以及金融市场在这一过程中的重要作用。

4. Jensen, N. M. (2003). Democratic governance and multinational corporations: Political regimes and inflows of foreign direct investment. International Organization, 57(3), 587-616.这篇文章研究了民主治理与跨国公司之间的关系，特别关注了政治体制对外国直接投资流入的影响。

国际贸易专业术语英文

国际贸易专业术语英文International trade professional terminology1. Free trade: The exchange of goods and services between countries without tariffs or trade barriers.2. Tariff: A tax or duty imposed on imports or exports by a government.3. Import: The purchase and bringing in of goods from foreign countries into a domestic market.4. Export: The sale and sending out of goods to foreign countries from a domestic market.5. Balance of trade: The difference in value between a country's exports and imports.6. Trade deficit: A situation in which a country imports more goods than it exports, resulting in a negative balance of trade.7. Trade surplus: A situation in which a country exports more goods than it imports, resulting in a positive balance of trade.8. Trade barrier: Any government policy or restriction that hinders international trade, such as tariffs, quotas, or embargoes.9. Dumping: Selling goods in a foreign market at a price lower than the production cost or below the market price to gain a competitive advantage.10. Anti-dumping duties: Additional tariffs imposed on goods that have been dumped in a foreign market to protect local industries from unfair competition.11. WTO (World Trade Organization): An international organization that promotes and regulates global trade by negotiating trade agreements and resolving trade disputes.12. FTA (Free Trade Agreement): A bilateral or multilateral agreement between countries to reduce or eliminate trade barriers, such as tariffs and quotas, to promote free trade.13. GATT (General Agreement on Tariffs and Trade): A multilateral agreement aimed at promoting global trade by reducing barriers, establishing rules and principles for trade, and providing a framework for international trade negotiations.14. NAFTA (North American Free Trade Agreement): A trilateral agreement between the United States, Canada, and Mexico to eliminate trade barriers and promote free trade in North America.15. FDI (Foreign Direct Investment): Investment made by a company in one country into a business or production facility located in another country.16. Intellectual property: Intangible assets, such as patents, copyrights, and trademarks, that are protected by law from unauthorized use or reproduction.17. Letter of credit: A financial instrument issued by a bank guaranteeing payment to the exporter upon presentation of specified documents, thus reducing the risk for the importer.18. Incoterms (International Commercial Terms): Standardized trade terms that define the obligations and responsibilities of buyers and sellers in international trade contracts.19. Customs duty: A tax imposed on goods when they are transported across international borders.20. Currency exchange rate: The rate at which one currency can be exchanged for another currency.。

FDI——精选推荐

Definition: an investment involving a long-term relationship and reflecting a lasting interest and control of a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor. In form of Greenfield investment: establishment of a new operation in a foreign country and Merger & Acquisition with an existing firm in the foreign country.Decline in trade barriers over the past 30 years;FDI has grown more rapidly: Driven by the political and economic changesGlobalization of the world economyTheoretical explanation:1.Ownership advantage:tangible assets-specific technological expertise ahead of others.Intangible assets-management style and experience dominant in competitive environment Eg. Volkswagen high reputation in China enables them to succeed in foreign market2.Location advantage: government policy, large market, cheap labour, scared resources etc.BP developed oil fields and established oil refineries in Alaska3.Internalization advantage: more profitable to internalize, control trade or supplies of rawmaterials in order to minimize transaction costs. E.g. Volkswagen has established component production, R&D, promotion, and after sale service department in China so that they can decrease the costs significantly and gain more profit.Motives of firms to FDI:1. Resource seeking: acquire particular and specific resource of a high quality at a lower real cost than home country. There are 3 types of resources:Physical resources: e.g. Chinese and Indian investors invest in agricultural industry such as sugar and coffee in AfricaLabour resources: cheap labour in Vietnam and ChinaTechnological capability or organizational skills: e.g. Indian companies’ alliances with EU or US firms in high-tech sectors2. Market seeking: market si ze, market growth, being adapted to local tastes, saving production and transaction cost, e.g.in China and India3. Efficiency seeking: to rationalize the structure of established resource-based or market-seeking investment that can gain from the common governance of geographically dispersed activities. Thus economies of scale and scope and risk diversification can be gained.4. Strategic asset or capability seeking: acquire the assets of foreign corporations to promote their long-term strategic objectives, especially sustaining or advancing their global competitiveness, e.g. Lenovo’s acquisition of IBM PC unit to gain technological capability- Respond to government restriction or promotion- Client followership or competitor followership: minimize the gap and maintain the market share. eg. KFC entered China in 1987, McDonald in19901.Attract new sources of demand2.Enter markets with superior profits, expand sales3.React to tax benefits or cheap factors of production4.Access to foreign technology5.Exploit monopolistic advantages6.Increase competitive advantage7.Reduce costs: diversify internationally; benefit from economies of scale8.Reduce risk: react to exchange rate movements, trade restrictionsCompare with exporting and licensing:Advantages:Limitations of exporting: high transportation and transaction costs –unprofitable; trade barriers-import restrictions; reliance on the third party agenciesLimitations of licensing: 1. licensing may result in a firm’s giving away valuable technological know-how to a potential foreign competitor eg. RCA licensed its colour TV tech to SONY; it quickly assimilated the tech and entered the US market to compete directly with RCA.2. Licensing does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.3. Problem arises when the firm’s competitive advantage is based not as much on its product as on management, marketing, and manufacturing capabilities that produce those products. FDI: valuable know-how; tight control over a foreign entity; benefit when a firm’s skills and know-how are not amenable to licensing. OLIDisadvantages: Expensive - requires stronger and longer-term of resource commitmentsRisky - involves direct operation in a different countryWhen the transportation cost and trade barriers such as tariff are low, cost of labour andresource similar, eg, EULicensing maybe preferred if other conditions are equalUnfavourable policies restricting FDI: high tax rate for foreign enterprise in UK; Japan prohibit FDI only allow JVSocio-economical environment is not stable in the host countryAdverse external effects, eg. Environmental problems, ethical issuesHost countries influence of inward FDI:Benefits:1.Resource-transfer effects: supply capital, technology, and resources boost that country’seconomy2.Employment effects: brings jobs to a host country E.g. when Toyota’s auto plant in Francein 1997 create 2000 direct jobs and perhaps another 2000 jobs in support industries.3.Balance-of-payments effects: first, a substitute for imports of goods or services, improvethe balance of payments. Second potential benefit when the MNE export goods andservices to other countries. E.g. in china exports increased contributed by MNE.4.Effect on competition and economic growthTakes the form of Greenfield investment, the number of players in a market increases and stimulates competition, prices lowered and consumers’ economic welfare increased.\ Costs:1.Adverse effects on competition: MNE may get funds elsewhere to subsidize its cost in thehost market, allow the firm to monopolize the market. Though Greenfield investments should increase competition, it is less clear if it takes the form of M&A2.Adverse effect on the balance of payment: first, may transfer earnings outflow to homecountry. May imports a substantial number of its inputs from abroad, leads to a debit on the current account of the host country3.National sovereignty and autonomy: host government concern that FDI may lead to lossof economic independence. Some countries (China) prohibit FDI in certain sectorsHome countries influence of outward FDI:Benefits:1.The home country’s balance of payments benefits from the inward flow of foreign earnings.2.Home countries may export components to host countries, therefore result in positiveemployment effects3.Valuable skills learned by MNE in foreign markets can be transferred back to the homecountry.Costs:1.The current account of the balance of payments suffers if the FDI is a substitute for directexports.2.Suffers from the initial capital outflow required to finance the FDI.3.Suffers if the purpose is to serve the home market from a low-cost production location. Ideologies influencing government’s attitude:The radical view: It traces its root to Marxist political and economic theory. They argue that MNE extract profits from the host countries and take them to their home countries, giving nothing of value to the host country in exchange. FDI should be prohibited or restricted.The free market view: It traces its root to classical economics and the international trade theories of Admin Smith and Ricardo. The free market view argues that international production should be distributed among countries according to the theory of comparative advantages. FDI should be allowed with no restriction.Pragmatic nationalism: In practice, many countries have adopted Pragmatic nationalism. FDI has both benefits and costs. FDI can benefit a host country by bringing capital, skills, technology, and jobs, but those benefits come at a cost. When a foreign company rather than a domestic company produces products, the profits from the investment go abroad.So countries adopt a pragmatic stance pursue policies designed to maximize the national benefits and minimize the national costs. FDI should be allowed as long as the benefits outweigh the costs. Its benefit could be increased when effective policy strategy is adopted. Government’s policies:Encourage:Home: government-backed insurance programs, eg. risk of expropriation, war losses, and the inability to transfer profit back home. Particularly useful in encouraging firms to undertake investments in political unstable countriesHost: common for governments to offer incentives to foreign firms to invest in their countries, e.g. tax concessions, low-interest loans, grants or subsidies. Incentives are motivated by a desire to gain from the resource-transfer and employment effects of FDI. Eg. China established special economic zone and successfully attracted many investors。

英语作文加拿大的经济

英语作文加拿大的经济下载温馨提示:该文档是我店铺精心编制而成，希望大家下载以后，能够帮助大家解决实际的问题。

文档下载后可定制随意修改，请根据实际需要进行相应的调整和使用，谢谢!并且，本店铺为大家提供各种各样类型的实用资料，如教育随笔、日记赏析、句子摘抄、古诗大全、经典美文、话题作文、工作总结、词语解析、文案摘录、其他资料等等，如想了解不同资料格式和写法，敬请关注!Download tips: This document is carefully compiled by theeditor. I hope that after you download them,they can help yousolve practical problems. The document can be customized andmodified after downloading,please adjust and use it according toactual needs, thank you!In addition, our shop provides you with various types ofpractical materials,such as educational essays, diaryappreciation,sentence excerpts,ancient poems,classic articles,topic composition,work summary,word parsing,copyexcerpts,other materials and so on,want to know different data formats andwriting methods,please pay attention!Canada's economy is one of the strongest in the world, due in part to its vast natural resources and highlyskilled workforce. The country is a major exporter of oil, natural gas, minerals, and timber, and its services sector is also thriving.The Canadian government has implemented policies to promote economic growth and stability, such as investing in infrastructure and providing tax incentives for businesses. Additionally, Canada has a stable banking system and a strong social safety net, which helps to support consumer spending and overall economic activity.One of Canada's biggest trading partners is the United States, with whom it has a free trade agreement. This agreement has helped to boost trade between the two countries and has contributed to the growth of many Canadian industries, such as automotive manufacturing and agriculture.Canada is also known for its highly skilled workforce, which is supported by a strong education system. The country has a high rate of post-secondary education, with many universities and colleges offering world-class programs in fields such as engineering, business, and technology.Overall, Canada's economy is diverse and resilient, with a strong focus on innovation and sustainability. Despite challenges such as the COVID-19 pandemic and ongoing trade tensions with other countries, Canada remains a leader in many industries and is well-positioned for continued growth and success in the future.。

国际贸易的常用术语

国际贸易的常用术语国际贸易作为不同国家之间商品和服务的交换，涉及到一系列的术语和概念。

下面是一些常见的国际贸易术语：1. 进出口（Import and Export）进出口是最基本的国际贸易术语，指的是国家将自己的货物和服务销售给其他国家，同时从其他国家购买货物和服务。

2. 贸易逆差（Trade Deficit）贸易逆差指的是一个国家的进口超过出口，导致外汇和国际储备的减少。

3. 贸易顺差（Trade Surplus）贸易顺差指的是一个国家的出口超过进口，导致外汇和国际储备的增加。

4. 关税（Tariffs）关税是进口和出口货物征收的税款。

它可以用来保护本国产业免受竞争，提高本国商品价格，或作为政府收入的一部分。

5. 非关税壁垒（Non-Tariff Barriers）非关税壁垒是其他限制贸易的手段，如配额、进口许可证、标准和认证要求等。

6. 自由贸易区（Free Trade Zone）自由贸易区是一些国家为了促进贸易和投资而设立的地区，通常在该区域内的国家之间取消或减少关税和非关税壁垒。

7. 关税配额（Tariff Quota）关税配额是指对某种商品施加的限制，超过配额的进口商品需要支付更高的关税。

8. 最惠国待遇（Most Favored Nation）最惠国待遇是指一个国家给予其他国家的最优惠的贸易条件，也即对某一国最好的待遇，同时也适用于其他所有国家。

9. 反倾销（Anti-Dumping）反倾销是指一个国家采取措施阻止其他国家通过低于市场价格销售商品来损害本国产业。

10. 世界贸易组织（World Trade Organization）世界贸易组织是一个负责监督和调解国际贸易纠纷的国际机构，其目标是促进全球贸易自由化和公平竞争。

11. 跨国公司（Multinational Corporation）跨国公司是指在多个国家开展业务的企业，其在不同国家之间进行生产、销售、投资和研发等活动。

12. 外汇市场（Foreign Exchange Market）外汇市场是全球货币的交易市场，用于进行国际贸易和投资的货币兑换。

商务英语口译 Unit 6 Foreign Direct Investment

• 1. 159 years and 40 World Expos have passed since then. The Expo has grown in scale and influence, taking forward technical innovations and bearing witness to human progress. From ice-cream cones, bottled water and electric lamps, to lifts, cars and aircraft, – all of these have emerged from Expos to become part of our daily lives. The themes of the Expo have also evolved, moving gradually from industrial strength, scientific and technological breakthroughs to where they are today, thinking about the future and the need for a harmonious coexistence between man and nature.
FDI. 3. Form a postive attitude towards FDI.
Revision
Translate the followings from English to
Chinese or vice versa.
• 1. 时光荏苒，159年过去了，世博会规模和影响已今非昔比，人类已见证了40届世界综合性博览会。世博会推动着人类的科技创新，见证了人类进步的足迹。小到蛋筒冰淇淋、瓶装水、电灯，大到电梯、汽车、飞机，都是从世博会走入公众的视野，最终融入人们的日常生活。因此诞生了这么一句名言，“一切始自世博”。世博会的主题也在不断演变，从展示国家实力、追求科技突破，逐步转向对人与自然和谐共存、人类社会发展前景的人文主义思考。

加拿大货物进出口贸易管理制度简介

加拿大货物进出口贸易管理制度简介加拿大为高度工业化国家，但因其人口稀少，国内市场狭小，其经济对外依存度高，对外贸易对加拿大经济具有举足轻重的作用。

2000年加拿大货物总出口额达4739亿加元，占其工业产值的三分之二，占国内生产总值(GDP)的45.6%，其比例居西方七国集团之首。

其他发达工业化国家一样，加拿大经济的一半以上为服务业。

目前加拿大三分之二的就业人口(约1100万)和67%的经济活动集中在服务业领域，只有三分之一的就业人口集中在农业、渔业、林业、能源和制造业。

加制造业主要生产其具技术优势的高价值资本类货物，如航空、通讯、电子、生物产品和汽车等；而其他资本类货物和普通消费产品(如家用小电器等)则几乎完全从国外进口。

目前，加拿大在货物贸易方面的主要贸易伙伴为美国(占加出口的86.9%和进口的67%)，其次为日本、英国、中国和墨西哥。

加国际贸易帐目一直保持顺差。

加拿大实行市场经济制度，市场管理制度较为成熟。

在国际贸易方面的政府法规及执法程序透明度较高，手续简便。

政府向企业提供的服务较为全面、及时。

下面将加拿大政府对货物贸易的管理制度框架作一简要介绍。

国际协定。

由于加拿大经济的增长对国际市场的依赖程度高，加拿大历来重视国际间降低关税、促进贸易的努力。

加拿大为世界贸易组织的创始成员之一、是北美自由贸易区(NAFTA)的成员，并与智利、以色列签订了“自由贸易协定”。

加拿大政府的这些努力对加产品进入国际市场提供了良好的政策环境，而且有助于保持加国内市场的公平竞争环境。

贸易经营权。

加拿大政府对公司、企业从事货物进出口不限制贸易经营权，任何在加联邦或省政府登记的企业均可根据商业需要从事对外贸易。

政府只对极少数大宗货物(如小麦、油菜籽等)规定贸易垄断权，或者通过成立国营公司开展经营(如石油)。

所依据的法律。

“加拿大商业公司法”。

货物进口管理加拿大对货物进口管理的重点是保持加市场的稳定且富有活力，以促进加工业部门的竞争力；及最大程度地保护消费者的安全。

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Canada and U.S.Outward FDI and Exports:Are China and IndiaSpecial?Madanmohan GhoshSenior Policy Analyst,Strategic Policy Branch,Environment Canada,Gatineau,CanadaWeimin Wang Researcher,Economic Analysis,Statistics Canada,Ottawa,Canada Using cross-country time series data for the period1989–2001 we analyze the Canadian and United States’outward FDI and export performances,particularly to China and India.Casual examination of data may suggest that Canada is underperform-ing in its exports and FDI to China,but results from our econometric model do not support that conclusion.We found that Canada’s FDI in India is lower than that predicted by the model.Interestingly,while the evidence that investors from the United States tend to invest more in the growing economies is quite strong,it is weak in the case of Canada.AlthoughThis study was undertaken when both the authors were with Industry Canada.Views expressed here are their own and do not necessarily reﬂect those of Environment Canada or Industry Canada,or Statistics Canada.Correspondence should be addressed to Madanmohan Ghosh, Senior Policy Analyst,Strategic Policy Branch,Environment Canada,Room2537,10Wellington Street,Gatineau,Quebec K1A0G5,Canada.E-mail:madanmohan.ghosh@ec.gc.ca465 THE INTERNATIONAL TRADE JOURNAL,Volume25,No.4,September–October2011 ISSN:0885-3908print/1521-0545online.DOI:10.1080/08853908.2011.597686466THE INTERNATIONAL TRADE JOURNAL in-depth research is necessary to understand these diﬀerences,it is plausible that there are mismatches between the areas where investment opportunities are available in the fastest-growing parts of the world such as China and India,and the areas in which Canadians have comparative advantage.For example,ﬁnancial services and mining constitute a big share in Canadian FDI abroad but these sectors are yet to be opened up in China and India.The U.S.FDI base is more diversiﬁed and better able to take advantage of the increased opportunities in fast-growing countries such as China and India.KEYWORDS FDI,exports,gravity model,Canada,United States,China,India*****I.INTRODUCTIONIncreased economic integration during the last two to three decades,led by reduction of barriers to internal and external trade and investment,domestic economic reforms,and technolog-ical progress,has resulted in rapid economic growth and dramatic increases in trade and investmentﬂows in many economies.1 China and India draw special attention in this area from aca-demics as well as policy makers.After long years of isolation,with limitations on theﬂows of foreign goods,services,and capital,the two Asian giants have in recent decades thrown their doors wide opened to both trade and investment(Guha and Ray2000).2 The average annual growth rate of per capita GDP in China exceeded8%during the last decade.GDP per capita in India 1The global stock of FDI almost tripled during the1980s followed by a twofold increase during the1990s reaching to US$15trillion in2008(UNCTAD2009a).2China’s isolation has been more profound.Its policy reversal came a decade earlier than that of India and was more radical and complete at least with respect to FDI.Ghosh and Wang:Canada and U.S (467)grew at a rate of over3.6%during the same period.In2003China received about10%of the world FDI inﬂows and became the world’s largest recipient of FDI for the second time.In2008the Chinese share in global inﬂow of FDI,however,declined to6.4%, partly due to economic slowdown in United States and Europe. India’s share in world inwardﬂows of FDI has increased from a low0.2%in2000to2.4%in2008(UNCTAD2009a).3Although the unusual magnitude of the ongoing economic andﬁnancial cri-sis raises major concerns about the propensity and capability of transnational corporations(TNCs)to continue investing abroad, China and India are ranked theﬁrst and third most preferred destinations of FDI during2009–2011(UNCTAD2009b).China’s share in world exports of goods and services regis-tered an increase from a little less than1%in1980to over8% in2008.In real term in2008,China accounted for more than6% of world output—more than one and a half times of Canada.4 Although India accounts for a smaller share(2.7%of world out-put in2008)compared to China its share in world exports of goods and services increased from0.4%in1980to1.08%2008.5 China and India’s sheer economic size,coupled with rapid growth,low wages,and increasingly skilled workforces make them a major destination for international investments and exports,as well as a low-cost supplier of a wide range of goods and services.3The comparatively low FDI statistics in India,however,raises some issues around how they are measured in India and China and their comparability (Pfeﬀerman2002).International Financial Corporation(IFC)notes that India’s FDI statistics exclude reinvestment earnings,subordinated debt,and overseas com-mercial borrowings.These are included in FDI in other countries.IFC also estimates that‘round-tripping’in China could be50%of total FDI inﬂows.After accounting for these diﬀerences IFC concludes that there is not a huge diﬀerence between China and India in FDI inﬂows as percent of GDP(Gordon2002).See also (Srivastava2003).4Measured in purchasing power parity(PPP)term China’s share of global output has risen from close to11%in2000to over13%in2004(Krueger2005).5The output share in computed from World Development Indicators Database and the trade shares are derived from UNCTAD’s trade database available online.468THE INTERNATIONAL TRADE JOURNAL In this article we examine how Canadian and U.S.investors and exporters have responded to increased market opportuni-ties abroad in general,and to China and India in particular during the late1980s and1990s.More speciﬁcally,we address four main issues.First,how have Canada and the United States responded to the expanding market opportunities in China and India during the period;second,how does Canada’s performance compare with that of the United States;third,what are the pos-sible explanations for the diﬀerences;and,ﬁnally,we comment on the potential opportunities in these economies.Using panel data for the period1989–2001,we separately esti-mate models of Canadian and U.S.FDI outﬂows and exports, based on a version of the Gravity Model.6Regression results suggest similarities as well as dissimilarities in the pattern of FDI and exportsﬂows from Canada and the United States As expected,the economic size and the degree of trade openness in the host countries and geographical distance between the source and host countries are found to aﬀect signiﬁcantly theﬂows of FDI and exports from Canada and the United States The cru-cial diﬀerence is that while U.S.investors tend to invest more in growing economies,there is only weak evidence as to the same for Canadian investors.In-depth research is necessary to understand why it is so.But it seems that there are mismatches between the areas where investment opportunities are openly available in the most rapidly expanding markets such as China and India, and areas in which Canadians have comparative advantage.For example,ﬁnancial services and mining are the areas in which a large share of Canada’s outward FDI is concentrated,but these sectors at the least were yet to be opened up in China and India.Given their sheer economic size and recent growth perfor-mance,we examine if China and India exert any special inﬂuence6The choice of study period was driven by the availability of comparable data for the set of major economies Canadian and U.S.FDI and exports are destined for.Ghosh and Wang:Canada and U.S (469)in driving Canadian and the U.S.outward FDI and exports.We do notﬁnd statistical evidence in support of China exerting any special inﬂuence in drawing exports and FDI from Canada and the United States.However,results show that Canadian FDI in India is lower than that predicted by the model.In the next section we describe the trends in Canada’s FDI and exports to China and India and compare it with that of the United States.In section3we provide a brief literature review focused on the determinants of bilateral FDI and trade.In sec-tion4,regression models and data sources are discussed.Section5 presents the empirical results and section6concludes.II.CANADA AND U.S.FDI AND EXPORTS TO CHINA AND INDIA:AN OVER VIEWThis section provides an overview of Canada’s,the United States’,China’s,and India’s FDI and exports during the last decades.In order to facilitate the explanation of our estimation results we have restricted our main discussions essentially to2002 or2003because they do not capture impacts beyond this year.FDI as a share of GDP(and its growth)has been higher for Canada than the United States during the past two or three decades.The stock of Canadian FDI abroad increased from9.5% in1982to38.3%of GDP in2002.During the same period the stock of U.S.FDI abroad increased from6.4to14.6%of GDP. The inwardﬂows of FDI in both countries also increased,but at a slower pace.For the United States the inwardﬂows increased from3.9%of GDP in1982to13.0%in2002.This implies that while the outﬂow-inﬂow gap remained stable over time for the United States,it widened for Canada from a net inﬂow position until1996,to a net outﬂow position in the subsequent years.In2007both exports and imports accounted for more than 35%of Canada’s GDP.Since1990,Canada’s export intensity and import penetration have increased considerably.For instance,470THE INTERNATIONAL TRADE JOURNAL between1990and2002,the ratio of exports to GDP in Canada increased by more than10percentage points(Ghosh and Rao 2005).Between1992and2002the world share of Canadian exports increased from3.6to3.9%,while that of the United States declined from11.9to10.7%.ChinaFDI in China started in1979(Lai2002),but dramatic growth took place in the1990s.Between1992and2002China’s share in world inward FDIﬂows increased from a little over1%in1990to more than6%in2002and its world import share almost doubled to5.3%during the same period(Table1).Casual observation suggests that while both the United States and Canada have generally followed the global trend in FDI and tradeﬂows into China,Canada lags behind the United States China’s share in Canada’s stock of outward FDI increased signiﬁcantly during the early1990s to0.23%in1995,but it fell to0.14%in2003.China’s share in U.S.outward FDI increased from0.11%in1992to0.68% in2002.In trade,the share of China in Canadian exports declined slightly,while China’s share in U.S.exports doubled to3.2% during the same period(Table1).In absolute terms,Canada’s total outward FDI stock nearly quadrupled between1990and2003,and its stock in China increased from$25million(CAD)in1991to$542million(CAD) in2003,implying a22-fold increase(Table2).U.S.outward FDI followed the same pattern.While the total U.S.stock of outward FDI to all destinations increasedﬁve times between1990and 2003,the U.S.stock in China increased24-fold from a level of US$426million in1991to US$10billion in2002(Table3).The inward stock of total FDI from all sources in China increased 22-fold from US$21billion in1990to US$448billion in2002. Theseﬁndings suggest that increased inﬂows of FDI into ChinaGhosh and Wang:Canada and U.S (471)Table1FDI and Exports from the World:Canada and United States toChina and India1992199520002002∗∗A.China’s share(%)World merchandise imports(%) 2.7 2.5 3.4 5.3Canadian exports 1.4 1.30.9 1.0U.S.exports 1.7 2.0 2.1 3.2World inward FDI(%) 1.1∗ 4.5 5.7 6.1 Canadian outward FDI0.040.230.160.14U.S.outward FDI0.110.400.850.68 B.India’s share(%)World merchandise imports(%)0.520.590.660.75Canadian exports0.330.170.140.20U.S.exports0.430.570.470.69World inward FDI(%)0.08∗0.190.290.37 Canadian outward FDI0.090.110.040.05 U.S.outward FDI0.100.160.180.24 Source:Trade data:Trade data online(Canada),USITC online database, International Trade Statistics,WTO.FDI:UNCTAD’s World Investment Report(2003,2004),Olisnet,US Bureau of Economic Analysis.Note:∗Data for1990∗∗Some correspond to2003data.from the United States and Canada are very much a part of global trend.A few countries dominate in Chinese inward FDI stock.Hong Kong has always been the most important source of China’s inward FDI,although its share has fallen recently.Average share of Hong Kong in accumulated FDI in China was48%during 1992–2000(last column in Table4).7In the1980s much of the investment from Hong Kong represented transfer of export-oriented,labor-intensive manufacturing industry to China with its relatively cheap labor.The continuously declining share of Hong Kong’s investment in the1990s reﬂects saturation of the export-oriented manufacturing industries in China(Lai2002).7Hong Kong’s share in Chinese FDI stock has fallen from68%in1992to38% in2000.T a b l e 2C a n a d i a n D i r e c t I n v e s t m e n t P o s i t i o n b y G e o g r a p h i c a l A r e a :1960–2003(C A D $m i l l i o n s a n d %)U n i t e d U n i t e d O t h e r O t h e r O t h e r A l l S t a t e s K i n g d o mE U J a p a n O E C D C h i n a I n d i a C o u n t r i e s C o u n t r i e s19601,7162774615––––2,60019703,51863630448142–––6,520198017,8493,0801,3771091,370–––28,413199060,04913,5277,0989173,99669412,80998,402199163,37915,2628,5052,1823,548258416,167109,068199264,50212,2719,0712,5213,957439819,326111,691199367,67712,90711,4782,8454,35522511022,940122,427199477,98715,03815,6203,4856,63525716927,293146,315199584,56216,41218,1062,7397,166********,886161,237199693,93917,82519,1922,6768,39241012838,804181,2381997110,70722,72222,4162,9859,28441912250,074218,6071998133,26724,95629,1493,26811,57944616960,244262,9091999151,77525,68628,3843,85312,38171124767,940290,7302000177,94335,17039,9985,61317,60056512979,617356,5062001190,52839,78642,1247,01325,17058914593,645398,8552002197,12840,18949,0529,51429,574601183103,575429,6332003164,87440,70358,3749,12326,97254218498,546399,134%C h a n g e 1992–2002∗205.6227.5440.8277.4647.41297.786.7435.9284.7%o f t o t a l 196066.010.71.80.6––––100.0197054.09.84.70.72.2–––100.0472198062.810.84.80.44.8–––100.0199061.013.77.20.94.10.010.1013.0100.0199158.114.07.82.03.30.020.0814.8100.0199257.811.08.12.33.50.040.0917.3100.0199355.310.59.42.33.60.180.0918.7100.0199453.310.310.72.44.50.180.1218.7100.0199552.410.211.21.74.40.230.1119.8100.0199651.89.810.61.54.60.230.0721.4100.0199750.610.410.31.44.20.190.0622.9100.0199850.79.511.11.24.40.170.0622.9100.0199952.28.89.81.34.30.240.0823.4100.0200049.99.911.21.64.90.160.0422.3100.0200147.810.010.61.86.30.150.0423.5100.0200245.99.411.42.26.90.140.0424.1100.0200341.310.214.62.36.80.140.0524.7100.0S o u r c e :C o m p u t e d f r o m S t a t i s t i c s C a n a d a C A N S I M T a b l e :376-0037,I n t e r n a t i o n a l I n v e s t m e n t P o s i t i o n a t b o o k v a l u e (h i s t o r i c a l c o s t ),i .e .,c u r r e n t d o l l a r s .N o t e t h a t t h e p e r c e n t a g e c h a n g e i s a l s o c o m p u t e d f r o m t h e F D I p o s i t i o n a t c u r r e n t d o l l a r s a s w e l l .T h e m a j o r p r o b l e m o f u s i n g b o o k v a l u e i s t h a t t h e c h a n g e i n F D I p o s i t i o n i n c l u d e s n e w i n v e s t m e n t (F D I ﬂo w s )a n d r e l a t i v e p r i c e c h a n g e s o f p h y s i c a l a s s e t s .473T a b l e 3U .S .D i r e c t I n v e s t m e n t P o s i t i o n A b r o a d o n a H i s t o r i c a l -C o s t B a s i s ,b y M a j o r R e g i o n s (U S $m i l l i o n s a n d %)L a t i n A m e r i c a n a n d W e s t e r n H e m i s p h e r e A s i a a n d Y e a r W o r l d C a n a d aM e x i c o N A F T A (i n c l .M e x i c o )E u r o p e P a c i ﬁc C h i n a I n d i aO t h e r1982207,75243,511n /a n /a 28,16192,44928,2824936015,3001985238,36947,934n /a n /a 30,417108,66435,29432238315,7381990430,52169,508n /a n /a 71,413214,73964,7183543729,7891991467,84470,711n /a n /a 77,677235,16372,21942641511,6481992502,06368,690n /a n /a 91,307248,74479,96256348512,7971993564,28369,92215,22985,151100,482285,73592,67191659914,5571994621,04474,98715,71490,701112,266310,031108,0752,5571,03013,1281995699,01583,49816,873100,371131,377344,596122,7112,7651,10514,0681996777,20391,30119,900111,201147,535382,366136,4813,8481,34415,6721997860,72399,85925,395125,254172,481420,934142,7045,1501,56319,59519981,000,70398,20026,657124,857196,755518,433159,6786,3501,59221,28719991,215,960119,59037,151156,741253,928627,754190,6219,4012,39014,66620001,316,247132,47239,352171,824266,576687,320207,12511,1402,37911,61420011,383,225141,78956,554198,343282,328716,901216,44511,3872,77514,37520021,520,965152,52258,074210,596272,363796,913269,94710,2943,67818,926%c h a n g e 1982–2002632.1250.5n /a n /a 867.2762.0854.520908.2921.723.71992–2002169.5118.1281.3147.3171.1178.9191.31023.8635.530.0%o f t o t a l4741982100.020.9n /a n /a 13.644.513.60.020.177.41985100.020.1n /a n /a 12.845.614.80.140.166.61990100.016.1n /a n /a 16.649.915.00.080.092.31991100.015.1n /a n /a 16.650.315.40.090.092.51992100.013.7n /a n /a 18.249.515.90.110.102.51993100.012.42.715.117.850.616.40.160.112.61994100.012.12.514.618.149.917.40.410.172.11995100.011.92.414.418.849.317.60.400.162.01996100.011.72.614.319.049.217.60.500.172.01997100.011.63.014.620.048.916.60.600.182.31998100.09.82.712.519.751.816.00.630.162.11999100.09.83.112.920.951.615.70.770.201.22000100.010.13.013.120.352.215.70.850.180.92001100.010.34.114.320.451.815.60.820.201.02002100.010.03.813.817.952.417.70.680.241.2%c h a n g e 1982–20020.0−52.1n /a n /a 32.117.730.42769.639.6−83.11992–20020.0−19.141.5−8.20.63.58.1316.9140.6−51.8S o u r c e :A d a p t e d f r o m B E A ,S u r v e y o f C u r r e n t B u s i n e s s ,v a r i o u s i s s u e s .T h e s e a r e c o m p u t e d f r o m F D I p o s i t i o n o n a h i s t o r i c a l c o s t b a s i s .475T a b l e 4A c t u a l F D I I n ﬂo w s i n C h i n a b y S o u r c e ,1992–20001992199319941995199619971998199920001992–2000V a l u e (m i l l i o n U S $)T o t a l 11,00827,51533,76737,52141,74545,27745,46340,31940,715323,328H o n g K o n g 7,50717,27519,66520,06020,67720,63218,50816,36315,500156,188U n i t e d S t a t e s 5112,0632,4913,0833,4433,2393,8984,2164,38427,329T a i w a n 1,0513,1393,3913,1623,4753,2892,9152,5992,29725,316J a p a n 7101,3242,0753,1083,6794,3263,4002,9732,91624,513S i n g a p o r e 1224901,1801,8512,2442,6063,4042,6422,17216,712V i r g i n I s l a n d s 3045381,7174,0312,6593,83313,082S o u t h K o r e a 1193747231,0431,3582,1421,8031,2751,49010,326U n i t e d K i n g d o m 382216899141,3011,8581,1751,0441,1648,404G e r m a n y 89562593865189937371,3731,0415,453F r a n c e 451411922874244757158848534,016M a c a u 2025875094405803954223093473,790N e t h e r l a n d s 28841111141254147195427892,926C a n a d a 581372162573383443173142802,261M a l a y s i a 25912012594603823402382032,199A u s t r a l i a 351101882331943142722633091,918S h a r e i n t o t a l (%)H o n g K o n g 68.262.858.253.549.545.640.740.638.148.3U n i t e d S t a t e s 4.67.57.48.28.27.28.610.510.88.5T a i w a n 9.511.410.08.48.37.36.46.45.67.8J a p a n 6.44.86.18.38.89.67.57.47.27.6S i n g a p o r e 1.11.83.54.95.45.87.56.65.35.2V i r g i n I s l a n d s0.81.33.88.96.69.44.0476S o u t h K o r e a 1.11.42.12.83.34.74.03.23.73.2U n i t e d K i n g d o m 0.30.82.02.43.14.12.62.62.92.6G e r m a n y 0.80.20.81.01.22.21.63.42.61.7F r a n c e 0.40.50.60.81.01.01.62.22.11.2M a c a u 1.82.11.51.21.40.90.90.80.91.2N e t h e r l a n d s 0.30.30.30.30.30.91.61.31.90.9C a n a d a 0.50.50.60.70.80.80.70.80.70.7M a l a y s i a 0.20.30.60.71.10.80.70.60.50.7A u s t r a l i a 0.30.40.60.60.50.70.60.70.80.6S o u r c e :F u n g ,I i z a k a a n d T o n g (2004).N o t e :F i g u r e s i n T a b l e 4a r e n o t d i r e c t l y c o m p a r a b l e w i t h t h a t i n T a b l e s 2a n d 3,b e c a u s e F D I ﬂo w a n d t h e c h a n g e i n F D I p o s i t i o n a r e n o t t h e s a m e i n c o n c e p t ,a n d a l s o b e c a u s e t h e s e d a t a a r e c o l l e c t e d /e s t i m a t e d b y C a n a d a ,U S ,a n d C h i n e s e s t a t i s t i c s a g e n c i e s s e p a r a t e l y w i t h p o t e n t i a l l y m e t h o d o l o g i c a l d i ﬀe r e n c e s .477478THE INTERNATIONAL TRADE JOURNAL Another40%of Chinese accumulated FDI originated from the United States,Taiwan,Japan,Singapore,the Virgin Islands, South Korea,and the UK.While the investment share of Hong Kong signiﬁcantly decreased,the share of the United States and the EU greatly increased.The shares of both the United States and Canada are rising and placed at8.5and0.7%,respectively, during1992–2000on average.Canada’s GDP being one tenth of the United States,this share is comparable if the U.S.FDI performance in China is used as the benchmark.The inward FDI to import ratios in China show that China receives proportionately higher levels of investments from abroad than the global average(Table5).However,the inﬂows from Canada and the United States into China are proportionately lower than their overall average investment from abroad.The outﬂow of FDI as a ratio of exports on average across all des-tinations from Canada and the United States are17%and 18%,respectively,compared to that in China of2.6%and10% in2000.The relatively smaller outﬂow of direct investment from Canada and the United States to China can be due toTable5Ratio of Outward FDI Flow to Export from Canada,the United States,and the World in China and India(%)Canada United States WorldOverall China India Overall China India Overall China India5.1 2.6 4.413.26.4 6.1 6.324.1 3.9 Average(1991–1996)199710.7 1.1 3.014.09.3 4.58.631.18.7 199816.0 4.010.019.313.09.812.431.2 6.1 19997.2 3.78.730.215.27.419.224.3 4.6 200016.8 2.6 5.618.310.310.918.618.1 4.5 Source:Trade data:Trade data online(Canada),USITC online database and International Trade Statistics,WTO,FDI:UNCTAD’s World Investment Report(2003,2004),OECD(Olisnet)database and U.S.,Bureau of Economic Analysis.Ghosh and Wang:Canada and U.S (479)several factors such as the distance,language,and other barriers discussed later.Outﬂow of FDI as a ratio of exports to China from Canada is much lower than that from the U.S.(3.7vs.15.2%in1999). Several factors may be responsible for the apparent diﬀerences in Canadian and the U.S.FDI performances in the Chinese market.A possible explanation may lie in the composition of Canadian and U.S.outward FDI compared to that of the Chinese inward FDI.Since data on the composition of Canadian and U.S.FDI bound to China are not available,we compare the overall(across countries)composition of Canadian and the U.S.FDI with that of Chinese inward FDI.Table6provides the composition of Chinese FDI by indus-try in2003.Tables7and8provide industrial composition ofTable6Composition of Chinese Inward FDI by Industry:2003US$100million Share(%)A.Primary Sector13.4 2.51.Agriculture10.0 1.92.Mining3.40.6B.Manufacturing374.770.0C.Utilities and Construction19.1 3.61.Utilities13.02.42.Construction 6.1 1.1D.Services127.923.91.Transportations8.7 1.62.Wholesale and Retail11.2 2.13.Finance 2.30.44.Real Estate52.49.85.Business Services17.2 3.26.S&T Services 2.80.57.Household Services31.6 5.9cation0.60.19.Health 1.30.2 Total535.1100.0 Source:/common/info.jsp?id=ABC00000000000016800 (accessed October19,2004).T a b l e 7C a n a d a ’s D i r e c t I n v e s t m e n t A b r o a d :Y e a r -e n d O u t w a r d P o s i t i o n b y I n d u s t r i a l S e c t o r (%),1992–2003A v e r a g e 1992199319941995199619971998199920002001200220031992–2003M i n i n g &q u a r r y i n g 21.6722.0622.0023.0824.6724.2822.3320.7918.9719.0419.5322.0221.20M a n u f a c t u r i n g 21.1818.8017.6716.8316.0816.2518.9218.5123.5118.1316.2315.9218.10C o n s t r u c t i o n 3.973.633.022.732.712.762.652.822.292.282.081.912.52T r a n s p o r t &c o m m u n i c a t i o n 12.9712.7713.9913.9712.7610.4110.5511.318.349.126.525.979.66F i n a n c i a l a c t i v i t i e s 28.7830.5130.5730.3532.0633.7232.5435.8133.8038.0242.0942.2235.92O t h e r s e r v i c e s 4.694.514.616.877.027.067.906.449.8610.0810.268.948.16U n a l l o c a t e d 6.747.728.156.164.715.515.114.323.253.343.293.034.43T o t a l100100100100100100100100100100100100100S o u r c e :C a l c u l a t e d u s i n g d a t a f r o m p .70,O E C D F D I S t a t i s t i c s Y e a r b o o k ,2004e d i t i o n .480T a b l e 8U .S .D i r e c t I n v e s t m e n t A b r o a d :Y e a r -e n d O u t w a r d P o s i t i o n b y I n d u s t r i a l S e c t o r (%),1992–2003A v e r a g e 1992199319941995199619971998199920002001200220031992–2003A g r i c u l t u r e &ﬁs h i n g 0.150.120.140.070.090.060.070.130.130.070.090.090.10M i n i n g &q u a r r y i n g 12.7712.447.917.047.597.547.305.965.485.445.415.526.76M a n u f a c t u r i n g 37.1034.0736.0637.7036.2934.1230.9426.9226.1322.4621.1921.1327.96E l e c t r i c i t y ,g a s &w a t e r 0.230.290.400.861.361.652.121.851.671.751.521.501.44C o n s t r u c t i o n 0.220.200.150.170.200.150.140.130.140.160.160.150.16T r a d e &r e p a i r 12.2511.865.7912.4110.9910.299.398.668.939.629.669.839.78H o t e l s &r e s t a u r a n t s 0.290.220.340.290.280.300.371.351.331.191.271.240.88T r a n s p o r t &c o m m u n i c a t i o n 1.611.811.982.082.052.322.633.493.211.921.481.242.14F i n a n c i a l a c t i v i t i e s 31.7535.5636.1935.2436.5038.3941.2719.7119.5420.2620.0620.3226.90R e a l e s t a t e &b u s i n e s s a c t i v i t i e s 2.071.973.553.463.964.564.4830.4632.3636.2138.4238.2822.60O t h e r s e r v i c e s 1.551.450.760.670.680.630.031.361.080.900.740.720.85U n a l l o c a t e d 0.000.006.740.000.000.001.260.000.000.000.000.000.43T o t a l100100100100100100100100100100100100100S o u r c e :C a l c u l a t e d u s i n g d a t a f r o m p .379,O E C D F D I S t a t i s t i c s Y e a r b o o k ,2004e d i t i o n .481482THE INTERNATIONAL TRADE JOURNAL Canadian and U.S.FDI between1992and2003.The phenomenal growth of FDI inﬂows into China has been dominated by the manufacturing sector8Over70%of inward FDI in China has been in the manufacturing sector,while the share of services is about 24%.A comparison of Tables7and8shows thatﬁnance and insurance account for more than42%of Canadian FDI-abroad as against20%for the same for United States in2003.When this is compared with the composition of Chinese inward FDI it appears that the share ofﬁnance and insurance is only0.43%in 2003.Similarly energy and mineral sectors account for a major share(22%in2003)in Canadian FDI abroad but it seems that China does not factor prominently in this sector.The share of mining in Chinese inward FDI in2003is merely0.63%.IndiaThe share of India in world merchandise imports as well as in inward FDI stock increased in the1990s.Between1992and 2002India’s share in world imports increased from0.52to0.72%, while the share of inward FDI increased substantially from0.08 to0.37%(Table1).In absolute terms the inward stock of FDI in India increased from US$1.66billion in1990to US$30.83billion in2003.The outward stock of FDI from India also increased substantially from a low US$63million in1993to more than US$5billion in2003(UNCTAD2004).Inﬂow of FDI from Canada and the United States into India has been relatively smaller than that into China in absolute terms (Table2and Table3).Stock of Canadian FDI in India almost doubled to184$CAD million in2003from94$CAD million in1990.The stock of U.S.FDI in India increased from a mere US$0.37billion in1990to US$3.7billion in2002.The dhare of India in total Canadian outward FDI stock has fallen from0.11% 8A rise in investment in the services industry in China recent years is in line with the global trend.。