Foreign Direct Investment Liberalization Between Canada and the USA: A CGE Investigation |
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| Authors: | Marcel Mérette Evangelia Papadaki Jorge Hernandez Yu Lan |
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| Institution: | (1) Department of Economics, University of Ottawa, Ottawa, Canada;(2) Canada Border Services Agency, Ottawa, Canada;(3) Statistics Canada, Ottawa, Canada;(4) Human Resources and Skills Development, Ottawa, Canada |
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| Abstract: | In this paper, we develop a computable general equilibrium (CGE) model to shed quantitative light on the implications of a
scenario of deeper economic integration between Canada and the United States, where the barriers for foreign direct investment
are preferentially eliminated. Our model distinguishes between the activities of domestic and foreign-owned firms at the microeconomic
level, both in terms of demand and production characteristics. Overall our findings suggest that further investment liberalization
between the two countries will accelerate the shaping of Canada’s industrial structure, as manifested by recent trends.
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| Keywords: | FDI Free trade Canada– USA CGE |
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