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Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America

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Author Info
Campos, Nauro F
Kinoshita, Yuko

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Abstract

This paper investigates the role of structural reforms –privatization, financial reform and trade liberalization– as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6690.

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Date of creation: Feb 2008
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Handle: RePEc:cpr:ceprdp:6690

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Related research
Keywords: financial reform; foreign direct investment; Latin America; privatization; trade liberalization; transition economies;

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Find related papers by JEL classification:
F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment

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