Foreign direct investment from Canada: An overview

Foreign direct investment (FDI) research on Canada has historically been centred on incoming rather than outgoing controlling capital. Yet the activities of Canada-based multinational enterprises (MNE) have fostered an impressive outflow of direct investment abroad. To appreciate the importance of Canada's MNE, one must understand the spatial and functional characteristics of Canadian parent companies and their foreign direct investments. To realize this goal, a sample of more than 17 000 examples of Canadian FDI (at various points in time) has been retrieved and analyzed. Spatially, the favourite target of Canadian outward FDI has been the United States and then the United Kingdom, bur significant agglomerations of Canadian controlling capital can be found in many parts of the world (particularly in Western Europe, the Caribbean region, Australia, and Brazil, and in various Asian destinations). The locations of Canadian parent companies have been heavily biased toward the largest metropolitan cities. Additionally, multinational enterprises headquartered in Toronto and Montreal control (by far) the most foreign subsidiaries. In general, manufacturing, financial and mining activities have constituted the most important endeavours of Canadian multinationals abroad. This pattern of functional emphasis, however, does vary with each specific location. Through a stepwise regression procedure, it was determined that market, trade (with Canada), labour, and crime conditions were critical place-specific criteria that affected the spatial decisions of Canadian direct investors.