The Institute for International Business is constantly working on issues that are top of mind to global leaders. In this section you will get a sense of the wide range of research underway and dive deeply into fascinating new thinking in this area.
Absorptive capacity, learning and profiting from outward FDI: Evidence from Canadian firms
By Walid Hejazi, Jianmin Tang and Weimin Wang
This research shows that firms in a productivity range below the required ex-ante threshold productivity level can successfully venture abroad when learning allows these firms to rise above that threshold productivity level, ex-post. The hypotheses developed are tested using panel data on firms operating in Canada over the period 2000 to 2014. These firm-level data include measures of productivity, firm size, R&D intensity, and when firms undertake outward FDI. The authors demonstrate that firms which venture abroad while in the threshold productivity range and also have sufficiently high levels of absorptive capacity, proxied by R&D intensity, are able to learn from their foreign experience, and hence increase their productivity levels, ex-post.
Canadian restrictions on FDI end up costing the country big
By Professors Walid Hejazi and Dan Trefler
This research shows FDI barriers are not only costly to Canadian consumers, but resulting inefficiencies have a ‘‘magnified effect’’ on the overall economy in terms of lagging productivity, fewer jobs and lower earnings. As the second most restrictive G7 country in FDI legislation, there restrictions cost the economy 137,400 jobs or 9.6 billion in lost earnings, distortions that are greater than the amount of excess profits gained by the incumbents. Losses loom larger than gains in some sectors. The research also highlights the merits of FDI to local economies and the importance of ensuring that basic business services sectors (key ‘upstream’ sectors air transportation, banking, and telecom) are operating as efficiently as possible.
Does Digital Trade Change the Purpose of a Trade Agreement?
By Professor Robert Staiger
Author Robert Staiger develops the first theoretical framework to study the economics of trade agreements when countries carry out digital transactions. The paper proposes that the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services (GATS) provide the tools to regulate trade in digital goods and services, and it shows how this regulation should happen.
Inventory Management, Product Quality, and Cross-Country Income Differences
By Professors Bernardo Blum, Sebastian Claro, Kunal Dasgupta, and Ignatius Horstmann
Global income inequality among OECD countries is the highest it has been for the past half century. Per-shipment costs — which affect the size and frequency with which exporters ship goods — vary widely between countries and are, indeed, correlated with economic output. Authors Bernardo Blum, Sebastian Claro, Kunal Dasgupta, and Ignatius Horstmann say that variation in per-shipment costs can explain nearly 40 percent of the income differences between countries. A country at the ninetieth percentile of per shipment costs has almost three times higher costs than at tenth percentile. Equalizing the per shipment cost across all countries at the level currently in the United States would have a significant impact on reducing income inequality across countries by 27 percent.
REPORT
Canada China Business Survey 2018-2019
By Sarah Kautulakos, Dr. Walid Hejazi and Daniela Stratulativ
The major issues of this report are:
• Responding to challenges stemming from recent bilateral political and legal tensions: December 1, 2018, to March 1, 2019
• Barriers to doing business in China and Canada
• Leveraging Brand Canada and trends in profitability
• Addressing intellectual property rights
• Looking to the future
Download the report »| Canada China Business Council Business Impact Survey 2018-2019
REPORT
Canada China Business Survey 2019-2020
By Sarah Kautulakos, Dr. Walid Hejazi and Daniela Stratulativ
The survey reveals that three main factors affected Canada-China business in 2019: Canada-China relations, the US-China trade war, and economic developments in China, with COVID-19 becoming a significant impediment to business in early 2020.
Download the report »| Canada China Business Council Business Impact Survey 2019-2020