FOREIGN DIRECT INVESTMENT IN CANADA

Abstract

We examine the importance of various economic and social factors on the flow offoreign direct investment (FD!) into Canada between 1980 and 7994. We find that international trade, home country GDP and cultural dis- tance are significant factors that influence the FD/ flow into Canada. The per capita GDP, relative cost offunds, rate of return, exchange rates, geographic distance and the implementation of the f ree trade agreement show no significant impact on the flow of FDI into Canada. The regressions have much more explanatory power when the United States FD! is included in the sample.

Keywords

• foreign direct investment
• international trade
• home country gdp
• cultural distance