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The Canada U.S. free trade agreement: Competitive tradeoffs between foreign direct investment and trade

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  • Ravichandran Munirathinam
  • Mary Marchant
  • Michael Reed

Abstract

This paper assesses the impact of the Canada U.S. Free Trade Agreement on exports and foreign direct investment of processed foods. Results indicate that U.S. exports to Canada more than doubled, while Canadian exports to the U.S. nearly doubled after the implementation of the Canada U.S. Free Trade Agreement in 1989. Regression results of the covariance model on panel data show that U.S. and Canadian food processing firms appear to use both exports and foreign direct investments as complementary market access strategies. Copyright International Atlantic Economic Society 1997

Suggested Citation

  • Ravichandran Munirathinam & Mary Marchant & Michael Reed, 1997. "The Canada U.S. free trade agreement: Competitive tradeoffs between foreign direct investment and trade," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(3), pages 312-324, August.
    • Handle: RePEc:kap:iaecre:v:3:y:1997:i:3:p:312-324:10.1007/bf02294917
    DOI: 10.1007/BF02294917
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    References listed on IDEAS

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    1. Yulin Ning & Michael R. Reed, 1995. "Locational determinants of the US direct foreign investment in food and kindred products," Agribusiness, John Wiley & Sons, Ltd., vol. 11(1), pages 77-85.
    2. Ruppel, Fred J. & Harris, J. Michael, 1995. "U.S. Trade Surplus in Processed Foods Expected To Continue," Food Review/ National Food Review, United States Department of Agriculture, Economic Research Service, vol. 18(2), May.
    3. Praveen M. Dixit & Vernon O. Roningen, 1989. "Quantitative Impacts of Creating an Agricultural Free Trade Area between the United States and Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 37(4), pages 1023-1033, December.
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    Cited by:

    1. Unknown, 1999. "Research Updates," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(1), pages 1-22, March.
    2. Mattson, Jeremy W. & Koo, Won W., 2002. "U.S. Processed Food Exports And Foreign Direct Investment In The Western Hemisphere," Agribusiness & Applied Economics Report 23547, North Dakota State University, Department of Agribusiness and Applied Economics.
    3. Marchant, Mary A. & Saghaian, Sayed H. & Vickner, Steven S., 1999. "Trade And Foreign Direct Investment Management Strategies For U.S. Processed Food Firms In China," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(2), pages 1-13.

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