ASM-I

This project aims to study how the signing of International Investment Agreements (IIAs) changes the structure of Canadian firms that trade and invest in IIA partner countries. The goal is to estimate how the investment protection portion of these agreements impacts Canadian firms’ decision to vertically integrate with its intermediate input suppliers in those countries or to horizontally integrate by expanding to new markets. The key issue is determining how much those agreements affect economic growth in Canada.

Additional dataset: Canadian Direct Investment Abroad (CDIA)

The role of intermediaries in international trade is increasing. Broadly defined, intermediaries act as a link between different parties in an agreement or transaction. This may include links in supply chains or specialized firms that assist manufacturers dealing with foreign markets. The purpose of this study is to analyze the importance of wholesalers, a specific type of intermediary, in terms of imports in Canada. In the United States 56% of firms that import are in fact intermediaries, accounting for the purchase of 24% of total imports. Information regarding intermediaries in Canada is scarce. Firm-level imports, either intermediate or finished products, can be categorized into direct and indirect imports. Direct imports are: (1) inputs purchased by manufacturers that are to be used in the production process, and (2) finished products purchased by retailers for the purpose of being sold to consumers. Indirect imports are intermediate products and finished products bought by wholesalers for resale to manufacturers or retailers. Thus, importing firms can be allocated to one of the four following bins: (1) direct importer – manufacturer, (2) direct importer – retailer, (3) indirect importer – wholesaler, and (4) mixed importer (i.e., both direct and indirect importer). This research paper will document the importance, characteristics, and determinants of each bin. As a secondary goal, this paper will investigate intermediation with respect to the United States and the North American Free Trade Agreement (NAFTA). This aspect is relevant since intermediaries possess a greater advantage over direct importing when the barriers to trade are more significant.

Data link: T2-Leap combined with import trade data, 2002-2012

This study investigates the impact of the Canada-U.S. Free Trade Agreement (FTA) on price dispersion in Canada. The impact of trade reforms on producer price dispersion is not straightforward: while increased competition would be expected to alleviate price differences by favoring the most productive firms, access to new markets alongside product differentiation may allow producers to charge more disperse prices.