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Does China have an impact on foreign direct investment to Latin America?

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Author Info

  • Alicia Garcia-Herrero

    (Bank of Spain)

  • Daniel Santabarbara

    (Bank of Spain)

Abstract

We analyze empirically whether the emergence of China as a large recipient of FDI has affected the amount of FDI received by Latin American countries. For the longest time span possible given data availability (from 1984 to 2001), we do not find a substitution from Latin American inward FDI to China, when other relevant factors are taken into account. However, concentrating on the last few years (from 1995 to 2001), when FDI boomed worldwide and negotiations for China’s WTO membership accelerated, the “Chinese” effect becomes highly significant. Assessing the impact country by country, China’s inward FDI appears to have hampered that of Mexico and Colombia.

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File URL: http://128.118.178.162/eps/if/papers/0508/0508010.pdf
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Bibliographic Info

Paper provided by EconWPA in its series International Finance with number 0508010.

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Length: 25 pages
Date of creation: 26 Aug 2005
Date of revision:
Handle: RePEc:wpa:wuwpif:0508010

Note: Type of Document - pdf; pages: 25
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Web page: http://128.118.178.162

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Keywords: China; Latin America; FDI;

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References

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  1. Florence Jaumotte, 2004. "Foreign Direct Investment and Regional Trade Agreements," IMF Working Papers 04/206, International Monetary Fund.
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Citations

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Cited by:
  1. Luis J. Álvarez & Emmanuel Dhyne & Marco Hoeberichts & Claudia Kwapil & Hervé Le Bihan & Patrick Lünnemann & Fernando Martins & Roberto Sabbatini & Harald Stahl & Philip Vermeulen & Jouko Vilmunen, 2006. "Sticky Prices in the Euro Area: A Summary of New Micro-Evidence," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 575-584, 04-05.
  2. Robert A Buckle & Amy A Cruickshank, 2007. "The Challenge of Structural Change in APEC Economies," Treasury Working Paper Series 07/06, New Zealand Treasury.
  3. Eduardo Lora, 2005. "Should Latin America Fear China?," Research Department Publications 4409, Inter-American Development Bank, Research Department.
  4. Aleksynska, Mariya & Havrylchyk, Olena, 2013. "FDI from the south: The role of institutional distance and natural resources," European Journal of Political Economy, Elsevier, vol. 29(C), pages 38-53.
  5. Avendano, Rolando & Alonso Arroba, Angel & Estrada, Arturo, 2009. "Adapting to the Rise of China: How can Latin American Companies Succeed?," MPRA Paper 25948, University Library of Munich, Germany.
  6. Bassem Kahouli & Anis Omri & Anissa Chaibi, 2014. "Environmental Regulations, Trade, and Foreign Direct Investment: Evidence from Gravity Equations," Working Papers 2014-189, Department of Research, Ipag Business School.
  7. De la Cruz Gallegos Jose Luis & Ivanova Boncheva Antonina & Ruiz-Porras Antonio, 2008. "Competition between Latin America and China for US Direct Investment," Global Economy Journal, De Gruyter, vol. 8(2), pages 1-22, June.
  8. Yuqing Xing, 2008. "FDI in China: Facts and Impacts on China and the World Economy," Working Papers EMS_2008_03, Research Institute, International University of Japan.
  9. Eduardo Lora, 2005. "Debe América Latina temerle a la China?," Research Department Publications 4410, Inter-American Development Bank, Research Department.
  10. Hung, Chih-Young & Chiang, Yi-Hui, 2009. "Does an upper limit on foreign direct investment matter?: The case of Taiwan," Journal of Asian Economics, Elsevier, vol. 20(5), pages 549-560, September.

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