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U.S. Foreign Direct Investment in Latin America and the Caribbean: A case of Remittances and Market Size

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  • Garcia-Fuentes, Pablo A.
  • Kennedy, P. Lynn
  • Ferreira, Gustavo F.C.

Abstract

This paper investigates the effect of remittances in attracting U.S. foreign direct investment flows to Latin America and the Caribbean (LAC). It uses an unbalanced panel data set for fifteen countries covering the period 1983-2010. The results suggest a positive and significant impact of remittances on U.S. FDI flows to LAC, but it depends upon the level of per capita GDP in the host country. Thus, a threshold of per capita GDP is needed for a country to benefit from the positive effect of remittances on U.S. FDI flows. Also, host country demand positively affects U.S. FDI flows to LAC, which supports the market size hypothesis.

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File URL: http://purl.umn.edu/142985
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Bibliographic Info

Paper provided by Southern Agricultural Economics Association in its series 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida with number 142985.

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Date of creation: 18 Jan 2013
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Handle: RePEc:ags:saea13:142985

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Keywords: Foreign direct investment; Remittances; Market size; United States; Latin America and the Caribbean; International Development; F21; F23; F24; O54;

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