IED en los países del MERCOSUR: ganadores y perdedores en los acuerdos ALCA y UE-MERCOSUR

The purpose of this paper is to analyze some additional issues related to foreign direct investment (FDI) and to the development of regional integration agreements (RIA).Firstly, we include additional variables to those that are generally considered in the gravity models of FDI determinants (they are related to the external sector and to the relative size of economies that are involved in each bilateral elationship).Secondly, the analysis of “winners” and “losers” is disaggregated at country level (in terms of total received FDI), with the purpose to consider possible effects of agreements on each MERCOSUR country in the frame work of ALCA and MERCOSUR-EU. The form that FDI among countries adopts allows us to profile winners and losers related to FDI flows in the framework of regional integration agreements. FDI increase could be associated to external creation of FDI. At the same time it is observed a greater elasticity of bilateral FDI flows related to foreign trade. If ALCA and MERCOSUR-EU agreements would increase trade flows –as is foreseeable- those flows would have a positive impact on FDI flows, and predominant forms of expansion would be open/resource seeking forms. In this framework and in relation to its potential to capture FDI, Brazil would be the only “winner” inside the bloc and Argentina would be probably the “loser”. In small economies Uruguay is near to be a “winner” and Paraguay a “loser”.