Global Links: Multinationals in Canada: An Overview of Research at Statistics Canada

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by John R. Baldwin and Guy Gellatly

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The paper's main objective is to provide a concise synthesis of a wide array of data and research on multinationals originating in Statistics Canada, focusing on both historical and current studies.

Chapter 2 discusses the macroeconomic contribution of foreign multinationals, focusing on two leading indicators of foreign multinational activity, foreign control and foreign direct investment. This chapter also describes studies that evaluate the contribution that foreign-controlled companies make to aggregate trade flows, linking changes in multinational trade intensity to the strategic reorganization of their production activities.

Chapter 3 concentrates on the strategies and activities of foreign multinationals that are relevant to ongoing debates over whether the presence of foreign multinationals promotes, or hampers, Canada's industrial competitiveness. This chapter first examines evidence that domestic and foreign firms respond differently to domestic market conditions. Second, it asks whether foreign firms compete in different ways than domestic firms do. Third, it examines the relative emphasis that foreign multinationals place on innovation and technology practices, and reports on the relationship between these activities and observable market outcomes. Fourth, it reports on the contribution that foreign-controlled firms make to productivity growth. Fifth, it discusses new research that focuses on the relationship between foreign ownership and head-office employment. Studies in these areas speak directly to the issue of whether foreign multinationals truncate or develop their corporate activities in host markets.

Chapter 4 focuses on studies that examine the foreign activities of Canadian-owned multinationals and how their domestic plants compare to foreign-controlled plants operating in Canada.

Chapter 5 offers an appraisal of Statistics Canada's research on multinationals.

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