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Foreign direct investment and profit outflows: a causality analysis for the Brazilian economy

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  • Fernando Seabra

    ()
    (Federal University of Santa Catarina)

  • Lisandra Flach

    ()
    (Universität Stuttgart)

Abstract

Most empirical works have focused on the effects of foreign direct investment (FDI) to exports and other economic performance indicators, whereas its impacts to profit outflows has been relatively neglected. This paper investigates the nature of the causal relationship between FDI and profit remittance in Brazil using the Granger causality test procedure developed by Toda and Yamamoto (1995). The findings in this paper indicate that FDI causes profit remittance and emphasize significant adverse long-run effects of FDI attraction policies for the Brazilian economy.

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File URL: http://www.accessecon.com/pubs/EB/2005/Volume6/EB-04F30012A.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 6 (2005)
Issue (Month): 1 ()
Pages: 1-15

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Handle: RePEc:ebl:ecbull:eb-04f30012

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  1. Ihrig, Jane, 2000. "Multinationals' response to repatriation restrictions," Journal of Economic Dynamics and Control, Elsevier, vol. 24(9), pages 1345-1379, August.
  2. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  3. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
  4. Manuel R. AGOSIN & Ricardo MAYER, 2000. "Foreign Investment In Developing Countries, Does It Crowd In Domestic Investment?," UNCTAD Discussion Papers 146, United Nations Conference on Trade and Development.
  5. Jansen, Karel, 1995. "The macroeconomic effects of direct foreign investment: The case of Thailand," World Development, Elsevier, vol. 23(2), pages 193-210, February.
  6. Yamada, Hiroshi & Toda, Hiro Y., 1998. "Inference in possibly integrated vector autoregressive models: some finite sample evidence," Journal of Econometrics, Elsevier, vol. 86(1), pages 55-95, June.
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Cited by:
  1. Srđan Boljanović, 2012. "A Sustainability Analysis Of Serbia’S Current Account Deficit," Economic Annals, Faculty of Economics, University of Belgrade, vol. 57(195), pages 139-172, October -.
  2. Klasen, Stephan & Herzer, Dierk & Nowak-Lehmann D., Felicitas, 2007. "In search of FDI-led growth in developing countries," Proceedings of the German Development Economics Conference, Göttingen 2007 14, Verein für Socialpolitik, Research Committee Development Economics.
  3. SULIMAN, Osman, 2013. "Do Capital Inflows Cause Currency Black Markets In Mena Countries? Causality Tests For Heterogeneous Panels," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 187-202.
  4. A. Yasemin Yalta, 2012. "Uncovering the channels through which FDI affects current account: the case of Turkey," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 5(2), pages 158-167.
  5. Lee, Chien-Chiang & Huang, Wei-Ling & Yin, Chun-Hao, 2013. "The dynamic interactions among the stock, bond and insurance markets," The North American Journal of Economics and Finance, Elsevier, vol. 26(C), pages 28-52.
  6. Dube, Smile, 2009. "Foreign Direct Investment and Electricity Consumption on Economic Growth: Evidence from South Africa," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 62(2), pages 175-200.
  7. Mutascu, Mihai & Shahbaz, Muhammad & Tiwari, Aviral Kumar, 2011. "Revisiting the relationship between electricity consumption, capital and economic growth: Cointegration and causality analysis in Romania," MPRA Paper 29233, University Library of Munich, Germany.

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