During the past decade, Canadian firms have undertaken significant expansion abroad. Today about 1,300 Canadian-based firms operate foreign (primarily U.S.) subsidiaries. Other major industrialized countries have experienced a similar expansion of direct investment abroad. This process of globalization has created important intra-firm linkages throughout world markets. Today, one-third of world trade is intra-firm.

This means that Canada's international competitiveness depends on both the presence of multinational enterprises (MNEs) in this country and Canadian-based MNEs abroad.

This volume considers some major issues linked with Canadian direct investment abroad: whether and to what extent outward direct investment imparts net benefits to the Canadian economy over and above those realized by the investing companies themselves; labour-market issues (shifts in employment between low and high productivity sectors); technology issues (adoption, skills, diffusion, transfer, R&D); and tax issues (objectives and constraints on taxation of FDI, and location effects).