Public Perceptions of Canada’s Investment Climate

By Flora Lutz, Yuanchen Yang, Chengyu Huang

July 26, 2024

Preview Citation

Format: Chicago

Flora Lutz, Yuanchen Yang, and Chengyu Huang. Public Perceptions of Canada’s Investment Climate, (USA: International Monetary Fund, 2024) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Canada’s muted productivity growth during recent years has sparked concerns about the country’s investment climate. In this study, we develop a new natural language processing (NPL) based indicator, mining the richness of Twitter (now X) accounts to measure trends in the public perceptions of Canada’s investment climate. We find that while the Canadian investment climate appears to be generally favorable, there are signs of slippage in some categories in recent periods, such as with respect to governance and infrastructure. This result is confirmed by both survey-based and NLP-based indicators. We also find that our NLP-based indicators would suggest that perceptions of Canada’s investment climate are similar to perceptions of U.S. investment climate, except with respect to governance, where views of U.S. governance are notably more negative. Comparing our novel indicator relative to traditional survey-based indicators, we find that the NLP-based indicators are statistically significant in helping to predict investment flows, similar to survey-based measures. Meanwhile, the new NLP-based indicator offers insights into the nuances of data, allowing us to identify specific grievances. Finally, we construct a similar indicator for the U.S. and compare trends across countries.

Subject: Climate finance, Competition, Economic sectors, Environment, Financial markets, Infrastructure, Mining sector, National accounts, Production, Productivity

Keywords: Canada, Climate finance, Competition, Global, Infrastructure, Investment Climate, Investment flow, Investmest climate, Machine Learning, Mining sector, Muted productivity growth, NLP-based indicator, Productivity, Sentiment Analysis

Publication Details

Pages:

40
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/165
Stock No:

WPIEA2024165
ISBN:

9798400284373
ISSN:

1018-5941

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