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Foreign Direct Investment and Economic Growth in Bolivia, 1990- 1998

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  • Nikolai Flexner

    (Fulbright Researcher-Central Bank of Bolivia)

Abstract

This paper employs ordinary least squares (OLS) estimation to examine the determinants of foreign direct investment (FDI) and the effect of FDI on per capita GDP growth in Bolivia over the period 1990:1-1998:4. The regression results find that the real effective multilateral exchange rate, the ratio of external debt to GDP, and a dummy representing capitalization inflows significantly impact FDI, while FDI, along with the terms-of-trade, the ratio of private sector credit to GDP, and the ratio of government spending to GDP are shown to have a statistically significant impact on per capita GDP growth. The exclusion of capitalization inflows from total FDI in the FDI determinants model has very little impact on the overall results.

Suggested Citation

  • Nikolai Flexner, 2003. "Foreign Direct Investment and Economic Growth in Bolivia, 1990- 1998," Macroeconomics 0309009, University Library of Munich, Germany, revised 19 Jan 2006.
    • Handle: RePEc:wpa:wuwpma:0309009
    Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 28 ; figures: included
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    More about this item

    Keywords

    Bolivia; Foreign Direct Investment; Economic Growth; Privatization; Capitalization;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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