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

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Author Info
Nauro Campos ()
Yuko Kinoshita ()

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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 William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number wp906.

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Date of creation: 01 Jan 2008
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Handle: RePEc:wdi:papers:2008-906

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

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

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