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Economic Freedom and Foreign Direct Investment in Latin America: A Panel Gravity Model Approach

Author

Listed:
  • Turan Subasat

    () (Izmir University of Economics)

  • Sotiris Bellos

    () (National Bank of Greece)

Abstract

This paper employs a panel data gravity model to examine the impact of economic freedom (EF) on foreign direct investment (FDI) in the context of Latin American countries. Our results suggest that while FDI responds to many EF measures positively, such results cannot be generalised.

Suggested Citation

  • Turan Subasat & Sotiris Bellos, 2011. "Economic Freedom and Foreign Direct Investment in Latin America: A Panel Gravity Model Approach," Economics Bulletin, AccessEcon, vol. 31(3), pages 2053-2065.
  • Handle: RePEc:ebl:ecbull:eb-11-00416
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I3-P185.pdf
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    References listed on IDEAS

    as
    1. Caetano, José & Caleiro, António, 2009. "Economic Freedom and Foreign Direct Investment -- How different are the MENA countries from the EU?," EconStor Preprints 144148, ZBW - German National Library of Economics.
    2. Philipp Harms & Heinrich W. Ursprung, 2002. "Do Civil and Political Repression Really Boost Foreign Direct Investments?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 651-663, October.
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    4. Bengoa, Marta & Sanchez-Robles, Blanca, 2003. "Foreign direct investment, economic freedom and growth: new evidence from Latin America," European Journal of Political Economy, Elsevier, vol. 19(3), pages 529-545, September.
    5. Drabek, Zdenek & Payne, Warren, 2002. "The Impact of Transparency on Foreign Direct Investment," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 777-810.
    6. Becchetti, Leonardo & Hasan, Iftekhar, 2005. "The Effects of (within and with EU) Regional Integration: Impact on Real Effective Exchange Rate Volatility, Institutional Quality and Growth for MENA Countries," WIDER Working Paper Series 073, World Institute for Development Economic Research (UNU-WIDER).
    7. de Haan, Jakob & Sturm, Jan-Egbert, 2000. "On the relationship between economic freedom and economic growth," European Journal of Political Economy, Elsevier, vol. 16(2), pages 215-241, June.
    8. Agnès Bénassy-Quéré & Maylis Coupet & Thierry Mayer, 2007. "Institutional Determinants of Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 30(5), pages 764-782, May.
    9. Noorbakhsh, Farhad & Paloni, Alberto & Youssef, Ali, 2001. "Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence," World Development, Elsevier, vol. 29(9), pages 1593-1610, September.
    10. Steven Globerman & Daniel Shapiro, 2003. "Governance infrastructure and US foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, pages 19-39.
    11. Kapuria-Foreman, Vibha., 2007. "Economic freedom and foreign direct investment in developing countries," Journal of Developing Areas, Tennessee State University, College of Business, vol. 41(1), pages 143-154, September.
    12. Sotirios Bellos & Turan Subasat, 2012. "Governance and foreign direct investment: a panel gravity model approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(3), pages 303-328, April.
    13. Turan Subasat, 2008. "Do liberal trade policies promote trade openness?," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(1), pages 45-61.
    14. Globerman, Steven & Shapiro, Daniel, 2002. "Global Foreign Direct Investment Flows: The Role of Governance Infrastructure," World Development, Elsevier, vol. 30(11), pages 1899-1919, November.
    15. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, pages 291-307.
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    Citations

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    Cited by:

    1. Shouro Dasgupta & Enrica De Cian & Elena Verdolini, 2016. "The Political Economy of Energy Innovation," Working Papers 2016.35, Fondazione Eni Enrico Mattei.
    2. Kazeem Bello AJIDE & P.B. EREGHA, 2014. "Economic Freedom And Foreign Direct Investment In Ecowas Countries: A Panel Data Analysis," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(2).
    3. Amar Iqbal Anwar & Mazhar Mughal, 2012. "Economic Freedom and Indian Outward Foreign Direct Investment: An Empirical Analysis," Economics Bulletin, AccessEcon, vol. 32(4), pages 2991-3007.
    4. Kahouli, Bassem & Maktouf, Samir, 2015. "The determinants of FDI and the impact of the economic crisis on the implementation of RTAs: A static and dynamic gravity model," International Business Review, Elsevier, pages 518-529.
    5. Turan Subasat & Sotirios Bellos, 2013. "Governance and foreign direct investment in Latin America: A panel gravity model approach," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 50(1), pages 107-131, May.

    More about this item

    Keywords

    Economic freedom; FDI; Latin America; panel gravity model.;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F0 - International Economics - - General

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