## Public Perceptions of Canada’s Investment Climate

_IMF Working Papers, July 26, 2024_

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**Canonical URL:** [Public Perceptions of Canada’s Investment Climate](https://www.imf.org/en/publications/wp/issues/2024/07/26/public-perceptions-of-canadas-investment-climate-552515)

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## Bibliographic details
- Authors: Flora Lutz, Yuanchen Yang, Chengyu Huang
- Published: July 26, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400284373.001

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### Study overview
- Title: Public Perceptions of Canada’s Investment Climate
- Authors: Flora Lutz, Yuanchen Yang, Chengyu Huang
- Date: July 26, 2024
- Publication type: IMF Working Papers
- Pages: 40
- Volume: 2024
- Issue: 165
- Series: Working Paper No. 2024/165
- DOI: https://doi.org/10.5089/9798400284373.001
- Stock No: WPIEA2024165
- ISBN: 9798400284373
- ISSN: 1018-5941
- Subjects: 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

### Research objective and method
- Objective: Measure trends in public perceptions of Canada’s investment climate amid concerns over muted productivity growth.
- Methodology: Development of a new natural language processing (NLP) based indicator by mining Twitter (now X) accounts to capture public sentiment on the investment climate.
- Comparative approach: Construct a similar NLP-based indicator for the U.S. and compare trends across countries.

### Key findings
- General assessment:
  - The Canadian investment climate appears to be generally favorable.
- Recent developments:
  - Signs of slippage in some categories in recent periods, notably governance and infrastructure.
- Cross-validation:
  - Slippage in governance and infrastructure is confirmed by both survey-based and NLP-based indicators.
- International comparison:
  - NLP-based indicators suggest perceptions of Canada’s investment climate are similar to perceptions of U.S. investment climate, except for governance.
  - Views of U.S. governance are notably more negative relative to Canada.
- Predictive power:
  - NLP-based indicators are statistically significant in helping to predict investment flows, similar to survey-based measures.
- Additional value:
  - The NLP-based indicator provides nuanced insights and allows identification of specific grievances.

### Implications and utility
- Policy relevance:
  - NLP-derived sentiment measures can complement traditional survey-based indicators when monitoring investment climate perceptions.
  - The indicators can help identify category-specific deterioration (e.g., governance, infrastructure) that may warrant targeted policy responses.
- Research and monitoring:
  - Comparable country-level NLP indicators (Canada and U.S.) facilitate cross-country monitoring of public sentiment related to investment climates.
- Practical advantage:
  - NLP-based indicators reveal granular grievances in public discourse that surveys may not capture.

*IMF Working Paper by Flora Lutz, Yuanchen Yang, and Chengyu Huang (July 26, 2024).*

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_Source: https://www.imf.org/en/publications/wp/issues/2024/07/26/public-perceptions-of-canadas-investment-climate-552515_