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

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  • Campos, Nauro F
  • Kinoshita, Yuko

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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Bibliographic Info

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

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References

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Citations

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Cited by:
  1. Altunbaş, Yener & Thornton, John, 2013. "Deposit insurance and private capital inflows: Further evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 27(C), pages 243-247.
  2. Antonakakis, Nikolaos & Tondl, Gabriele, 2012. "Do determinants of FDI to developing countries differ among OECD investors? Insights from Bayesian model averaging," Discussion Papers 1/12, Europa-Kolleg Hamburg, Institute for European Integration.
  3. Martin Schmitz, 2009. "Financial Reforms and Capital Flows to Emerging Europe," The Institute for International Integration Studies Discussion Paper Series iiisdp278, IIIS.
  4. Elif Arbatli, 2011. "Economic Policies and FDI Inflows to Emerging Market Economies," IMF Working Papers 11/192, International Monetary Fund.
  5. World Bank, 2009. "Macedonia - Moving to Faster and More Inclusive Growth A Country Economic Memorandum : Main Report and Annex," World Bank Other Operational Studies 3067, The World Bank.
  6. Ponce, Aldo, 2010. "Foreign Direct Investment and Civil Rights: Testing Decreasing Returns to Civil Rights," MPRA Paper 22020, University Library of Munich, Germany.
  7. Jean-François HOARAU, 2009. "Investissements Directs Étrangers Et Intégration Régionale : Un État Des Lieux Pour Le Marché Commun D’Afrique De L’Est Et Du Sud," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 29, pages 69-103.
  8. Nahla Samargandi & Jan Fidrmuc & Sugata Ghosh, 2014. "Is the Relationship between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle Income Countries," CESifo Working Paper Series 4743, CESifo Group Munich.
  9. José Vargas-Hernández, 2010. "Las maquiladores en Centroamérica. (Axe II, Symposium 6)," Post-Print halshs-00503171, HAL.
  10. Lefilleur, Julien & Maurel, Mathilde, 2010. "Inter- and intra-industry linkages as a determinant of FDI in Central and Eastern Europe," Economic Systems, Elsevier, vol. 34(3), pages 309-330, September.
  11. Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.

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