Foreign Direct Investment in Mexico during the 1990s: An Empirical Assessment
AbstractThis paper examines the major economic and institutional factors underlying the surge in foreign direct investment (FDI) flows to Mexico during the 1990s. It presents evidence that indicates that market-friendly economic reforms and major changes in the institutional-legal status of foreign capital are, in large measure, responsible for the rapid increase in FDI inflows to leading sectors of the Mexican economy. The econometric results presented in the paper suggest that market size, the real exchange rate, and institutional reforms such as the elimination of restrictions on profit and dividend remittances and the implementation of a selective debt conversion program are economically significant in explaining the variation in FDI inflows to the country. Finally the paper addresses the long-term negative effects that rapidly growing profit and dividend remittances may have on the financing of capital formation and the Mexican balance of payments.
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Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 28 (2002)
Issue (Month): 3 (Summer)
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Foreign Direct Investment;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Magnus Blomstrom & Edward N. Wolff, 1994.
"Multinational Corporations and Productivity Convergence in Mexico,"
NBER Working Papers
3141, National Bureau of Economic Research, Inc.
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- Kevin Honglin Zhang, 2001. "What Attracts Foreign Multinational Corporations To China?," Contemporary Economic Policy, Western Economic Association International, vol. 19(3), pages 336-346, 07.
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- Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
- Jordaan, Jacob A., 2008. "Intra- and Inter-industry Externalities from Foreign Direct Investment in the Mexican Manufacturing Sector: New Evidence from Mexican Regions," World Development, Elsevier, vol. 36(12), pages 2838-2854, December.
- Javalgi, Rajshekhar (Raj) G. & Deligonul, Seyda & Ghosh, Amit K. & Lambert, Douglas M. & Cavusgil, S. Tamer, 2010. "Foreign market entry mode behavior as a gateway to further entries: The NAFTA experience," International Business Review, Elsevier, vol. 19(3), pages 209-222, June.
- Ramirez, Miguel D., 2003. "Mexico under NAFTA: a critical assessment," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(5), pages 863-892.
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