Methodology & Glossary

The APF Canada Investment Monitor tracks foreign direct investment announcements at the firm level, taking a bottom-up approach rather than reviewing the balance of payments in Canada’s national accounts.

In order to generate the Investment Monitor data, APF Canada uses its own unique legacy data, third-party data sources, metasearch engines, and other search tools to aggregate data obtained from public sources including media reports, company documents, industry associations, and investment promotion agencies. Investment announcements that will be entered in the database include greenfield investments, asset purchases, equity investment, mergers, acquisitions, and joint ventures. 

The Investment Monitor sources its investment stories primarily from its decades-long archive of announcements on deals, trade missions, MoUs and other developments of note in the Canada-Asia relationship. Such a vast archive allows the APF Canada Investment Monitor to build a strong foundation on which to track deal flow both historically and going forward. Each deal announcement is recorded, catalogued, and added to our database. Deals are recorded using 32 different observations ranging from parent company to destination city. Key to this cataloguing of investments for trend analysis is the use of a user-friendly sector classification system. Whereas deals catalogued with the widely used North American Industry Classification System often hide key trends in budding industries, the APF Canada Investment Monitor’s use of the modified Industrial Classification Benchmark (Modified ICB) allows it to clearly see growth in areas such as clean tech and the video gaming industry. 

Dollar values for the Investment Monitor are obtained through a thorough investigation of the deal value and, barring an official value, the best publicly available estimate. This methodology allows for the avoidance of errors that occur in databases that estimate deal value using proprietary algorithms.

A B D E F G M P R S V

A

Asset-seeking (investment)

An investment made to obtain technologies, brands, distribution chains, or human capital.

B

Brownfield (investment)

An investment from a company in existing facilities in order to start new production activities, either through a merger and acquisition or through acquiring a significant number of shares.

D

Deal (investment)

Investment contracts or arrangements that finance the creation or expansion of a business. 

E

Efficiency-seeking (investment)

An investment that seeks to maximize cost efficiency by capitalizing on economies of scale or utilizing the comparative advantages of other markets.

F

Flow (investment)

A direct investment through a cross-border transaction during a period of time. Financial flows consist of equity transactions, reinvestment of earnings, and intercompany debt transactions.

Foreign direct investment (FDI)

A long-term or lasting-interest investment by a resident or enterprise of one economy into a tangible asset of another economy. This type of investment is deemed to be “long-term” or of a “lasting interest” if it is either a greenfield investment or an acquisition of at least 10 per cent equity or voting shares in an enterprise. This 10 per cent threshold is considered a controlling interest in an enterprise and is what primarily distinguishes FDI from a portfolio investment, since it also usually coincides with a transfer of management, technology, and organizational skills along with capital.

Foreign portfolio investment (FPI)

A temporary investment by a resident or enterprise of one economy into a financial asset of another economy. This investment involves a non-controlling stake in an enterprise in the form of equity and/or debt securities as well as loans.

G

Greenfield (investment)

A greenfield investment is an investment from a company in a new venture outside its own economy that results in the construction of a new facility (distribution hubs, production factories, offices, and/or living quarters) or an expansion upon such an initial investment.

M

Market-seeking (investment)

An investment that looks to expand, defend, or enter an overseas market.

Mergers and acquisitions (M&A)

An M&A investment is an investment in an existing company through acquiring a significant number of shares.

P

Position (investment)

Please see the definition for stock (investment).

R

Resource-seeking (investment)

An investment that looks to secure better access to raw materials such as oil, gas, and minerals, or other input factors.

S

Scale (investment)

The size of investment dollar value. 

Scope (investment)

The distribution of investments across regions and industries.

Sovereign wealth fund (SWF)

A state-owned investment fund that invests revenue from a nation’s foreign exchange reserves or commodity exports in real and financial assets or in alternative investments.

State-owned enterprise (SOE)

An enterprise in which national or sub-national governments have a controlling interest. As it pertains to the APF Canada Investment Monitor, a controlling interest refers to 10 per cent or more of the voting power, or where the government is the largest single shareholder.

Stock (investment)

The total value of assets invested in an economy at a period of time.

 

V

Volume (investment)

The number of investment deals.