Welcome to Canada: Foreign Direct Investment and Innovation

The Conference Board of Canada, 74 pages, November 13, 2017
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Canadians often lament the “loss” of another Canadian company when it is acquired by a foreign company. This report, however, finds a positive relationship between foreign direct investment and Canadian innovation.

Cette publication comprend un résumé en français, suivi d'une version anglaise du rapport intégral.

Document Highlights

When an innovative Canadian company is acquired by a foreign company, Canadians may instinctively lament the “loss” of another innovative Canadian company. This initial reaction needs to be tempered. We have to be open to the possibility that a merger and acquisition may actually lead to more innovative activity in Canada. But more importantly, we need to consider individual acquisitions in a broader context of cross-border investment and innovation, a context that includes multiple channels and incoming and outgoing flows.

Welcome to Canada: Foreign Direct Investment and Innovation has found a positive relationship between FDI and Canadian innovation. This conclusion holds across different kinds of flows and investment types.

Table of Contents

EXECUTIVE SUMMARY

Chapter 1–Introduction

  • Objectives
  • Method
  • Guide to the Report

Chapter 2–Conceptual Framework

  • Investment
  • Innovation and Investment
  • Foreign Investments and Innovation
  • Conclusion

Chapter 3–Recent Trends

  • Top Line Evidence
  • Do Foreign Investors Innovate in Canada?
  • Channels of Foreign Investment
  • The Venture Capital Channel

Chapter 4–Case Studies

  • Case 1: Open Text Corporation Acquires Dell Enterprise Content Division
  • Case 2: Salesforce.com Inc. Acquires Radian6
  • Case 3: Ritchie Bros. Acquires IronPlanet
  • Case 4: New Enterprise Associates Invests in D2L Corporation
  • Case 5: Pratt & Whitney Canada Innovates From a Canadian Base

Chapter 5–Conclusions

  • The Pros and Cons of Cross-Border M&As
  • Foreign Direct Investors Are Among the Innovation Leaders
  • U.S. Venture Capital Fills the Gaps
  • Implications for Canadian Policy

Appendix A–Bibliography

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