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"In the wake of falling trade costs, two central consequences in the importing economy are, first, that stronger competition through increased imports can lead to market share reallocations among domestic firms with different productivity levels (selection). Second, the increase in imports might improve domestic technologies through learning externalities (spillovers). Each of these channels may have a major impact on aggregate productivity. This paper presents comparative evidence from a sample of OECD countries. We find that the average long run effect of an increase in imports on domestic productivity is close to zero. If the scope for technological learning is limited, the selection effect dominates and imports lead to lower productivity. If, however, imports are relatively technology-intensive, imports also generate learning that can on net raise domestic productivity. Moreover, there is somewhat less selection when the typical domestic firm is large. The results support models in which trade triggers both substantial selection and technological learning"--National Bureau of Economic Research web site

Using a general equilibrium framework, the paper derives trade policy endogenously for a small country. It shows that, contrary to the existing literature, a lobbying industry is not guaranteed trade protection; it may even face trade taxes. Besides lobbying, trade policy depends on other factors such as the trade revenue distribution rule, income distribution across groups, trade openness, factor substitutability in production, industry employment size, and labor market flexibility. The paper also shows that the observed phenomenon of government preference for import tariffs over export subsidies—a long overdue puzzle—is an inherent outcome of lobbying equilibrium. It also shows that trade policies such as import tariffs and export taxes that have the same impact on economic market—Lerner symmetry (1936)—are driven by the same forces in the political market.

Using firm level data in Canada from 2002 to 2007, I show that trade is highly concentrated, much more than employment. Firms that both export and import are more productive than firms that only export, which are more productive than firms that only import. Foreign-controlled firms are larger, export more per employee, and have higher productivity compared to Canadian-controlled counterparts. The intensity of global value chains is higher for firms that are smaller, have higher numbers of export products and export partner countries, and are under foreign control. The role of new products and new firms is falling for Canada's exporter.

The paper derives trade policies endogenously for final consumption and intermediate input industries in the presence of a non‐traded sector. Contrary to what the existing literature suggests, results show that there is no definite relation between lobbying status and the direction of trade policy of an industry. Trade protection of an industry depends on how its consumption (horizontal) and production (vertical) linkages with other industries reinforce or cancel out its lobbying efforts. To cite a few results, (i) an organized industry may face trade tax, whereas an unorganized one may obtain protection; (ii) an organized downstream industry may not be able to impose trade tax to an unorganized upstream industry, (iii) an organized upstream industry may not hurt unorganized downstream industry, (iv) lobby for non‐traded industry alone can influence trade policies, and (v) lobby for traded industry affects the size of the non‐traded sector in the economy.

Abstract We study international technology transfer through R&D spillovers in sixteen countries' manufacturing industries since the early 1970s. The analysis shows that the productivity impact of international technology transfer often exceeds that of domestic technological change, more so in high‐technology industries. Moreover, technology transfer is found to be strongly varying across country‐pairs and tends to decline in geographic distance, pointing to goods trade as the transfer channel. We directly evaluate this hypothesis, and results suggest that trade is crucial for technology transfer from Germany, France, and the UK, while for the US, Japan, and Canada non‐trade channels are more important.

Canada was a major net importer of foreign direct investment (IFDI) prior to 1996. The stimulus for the surge in Canada's outward FDI (OFDI) came from profitable investment opportunities abroad. Canada has diversified significantly its OFDI away from the United States over the past 20 years. The financial crisis significantly affected Canada's FDI outflows, but OFDI seems to have rebounded in the second half of 2009. While Canadian investment has historically gone mainly to developed countries, recent changes in Government policies seem to suggest that Canada is looking to build closer ties with developing countries as well. Canada has a longstanding commitment to multilateral cooperation and actively supports the World Trade Organization (WTO) framework as a way to promote international trade and investment. At the same time, Canada continues actively to negotiate foreign investment promotion and protection agreements (FIPAs).

Canada has actively participated in the corporate globalization process and is a major importer of foreign direct investment (FDI). Canada's high levels of inward FDI (IFDI) over the past 25 years reflect its improved business climate, reduced restrictions on foreign ownership and a prospering economy. Like other developed economies, Canada experienced declining FDI inflows in 2008 and 2009, largely due to the dramatic fall in mergers and acquisitions (M&As) and the global economic recession. The outlook for 2010 and beyond however is promising because of the expected economic expansion in Canada and other countries, and improved global financial markets. Moreover, the Canadian Government has sent strong signals to foreign investors that Canada is open for business by, among other things, lifting restrictions on previously protected sectors and increasing the financial thresholds for the review of foreign investments.