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

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  • Campos, Nauro F

    ()
    (Brunel University)

  • Kinoshita, Yuko

    ()
    (International Monetary Fund)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3332.

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Length: 51 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3332

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

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Cited by:
  1. Nikolaos Antonakakis & Gabriele Tondl, 2011. "Do determinants of FDI to developing countries differ among OECD investors? Insights from Bayesian Model Averaging," FIW Working Paper series 076, FIW.
  2. 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.
  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. Elif Arbatli, 2011. "Economic Policies and FDI Inflows to Emerging Market Economies," IMF Working Papers 11/192, International Monetary Fund.
  5. 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, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 29, pages 69-103.
  6. 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.
  7. Aeggarchat Sirisankanan, 2014. "Rethinking Thailand¡¯S Growth Policies," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, Chung-Ang Unviersity, Department of Economics, vol. 39(2), pages 51-73, June.
  8. Martin Schmitz, 2011. "Financial reforms and capital flows to emerging Europe," Empirica, Springer, vol. 38(4), pages 579-605, November.
  9. José Vargas-Hernández, 2010. "Las maquiladores en Centroamérica. (Axe II, Symposium 6)," Post-Print halshs-00503171, HAL.
  10. Ponce, Aldo, 2010. "Foreign Direct Investment and Civil Rights: Testing Decreasing Returns to Civil Rights," MPRA Paper 22020, University Library of Munich, Germany.
  11. 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.
  12. World Bank, . "World Bank East Asia and Pacific Economic Update, April 2014 : Preserving Stability and Promoting Growth," World Bank Other Operational Studies 18378, The World Bank.
  13. 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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