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Foreign Direct Investment and Structural Reforms

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Author Info

  • Yuko Kinoshita
  • Nauro F. Campos

Abstract

This paper investigates the role of structural reforms -financial reforms, trade liberalization, and privatization- 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 International Monetary Fund in its series IMF Working Papers with number 08/26.

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Length: 38
Date of creation: 01 Jan 2008
Date of revision:
Handle: RePEc:imf:imfwpa:08/26

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Keywords: Privatization; Foreign direct investment; Latin America; Transition economies; Central and Eastern Europe; fdi; financial sector; financial reform; direct investment; host country; foreign investors; financial liberalization; market size; foreign investment; financial markets; financial market; bond; financial globalization; foreign capital; financial reforms; investment decisions; financial intermediation; direct investment inflows; foreign ownership; foreign banks; liquid liabilities; macroeconomic stability; foreign buyer; financial sector development; financial market development; financial system; stabilization programs; financial intermediaries; international trade; industrial countries; horizontal linkages; international investment; financial sector liberalization; foreign investor; technology spillovers; financial institutions; multinational enterprises; foreign investment flows; financial systems; manufacturing sector; credit markets; financial structure; multinational enterprise; foreign direct investors; international financial statistics; stock market; international country risk guide; financial economics; stock markets; investment climate; financial assets; host countries; direct foreign investment; international investors; bond estimator;

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References

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Citations

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Cited by:
  1. José Vargas-Hernández, 2010. "Las maquiladores en Centroamérica. (Axe II, Symposium 6)," Post-Print halshs-00503171, HAL.
  2. Ponce, Aldo, 2010. "Foreign Direct Investment and Civil Rights: Testing Decreasing Returns to Civil Rights," MPRA Paper 22020, University Library of Munich, Germany.
  3. 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.
  4. 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.
  5. Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.
  6. 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.
  7. Elif Arbatli, 2011. "Economic Policies and FDI Inflows to Emerging Market Economies," IMF Working Papers 11/192, International Monetary Fund.

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