Governance and foreign direct investment in Latin America: A panel gravity model approach
It is widely argued that good governance is an important determinant of foreign direct investment (FDI). With the exception of studies of corruption, however, empirical research on the link between governance and FDI is limited, particularly in the context of Latin America. Moreover, recent studies by Bellos and Subasat (2012a and 2012b) suggest that poor governance is a source of attraction rather than a hurdle for multinational companies in selected transition countries. By employing a panel data gravity model, this article aims to verify these unusual and interesting results in the context of selected Latin American countries. Our results confirm that the FDI enhancement role of poor governance exists not only in the transition countries but also in Latin America.
Volume (Year): 50 (2013)
Issue (Month): 1 (May)
|Contact details of provider:|| Postal: Avda. Vicuña Mackenna 4860, Macul, Santiago|
Phone: (562) 354-4303
Fax: (562) 553-1664
Web page: http://www.economia.uc.cl
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ronald B. Davies & Amélie Guillin, 2014.
"How Far Away is an Intangible? Services FDI and Distance,"
The World Economy,
Wiley Blackwell, vol. 37(12), pages 1731-1750, December.
- Ronald B. Davies & Amélie Guillin, 2011. "How far away is an intangible? Services FDI and distance," Working Papers 201120, School of Economics, University College Dublin.
- Ronald B. Davies & Amelie Guillin, 2011. "How Far Away is an Intangible? Services FDI and Distance," The Institute for International Integration Studies Discussion Paper Series iiisdp380, IIIS.
- Ronald B. Davies & Amélie Guillin, 2011. "How Far Away is an Intangible? Services FDI and Distance," CESifo Working Paper Series 3599, CESifo Group Munich.
- Addison, Tony & Heshmati, Almas, 2003. "The New Global Determinants of FDI Flows to Developing Countries: The Importance of ICT and Democratization," WIDER Working Paper Series 045, World Institute for Development Economic Research (UNU-WIDER).
- Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
- Eaton Jonathan & Tamura Akiko, 1994. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," Journal of the Japanese and International Economies, Elsevier, vol. 8(4), pages 478-510, December.
- Jonathan Eaton & Akilo Tamura, 1994. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," Boston University - Institute for Economic Development 48, Boston University, Institute for Economic Development.
- Jonathan Eaton & Akiko Tamura, 1995. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," NBER Working Papers 4758, National Bureau of Economic Research, Inc.
- Selen Sarisoy Guerin, 2006. "The Role of Geography in Financial and Economic Integration: A Comparative Analysis of Foreign Direct Investment, Trade and Portfolio Investment Flows," The World Economy, Wiley Blackwell, vol. 29(2), pages 189-209, 02.
- Peter Egger, 2008. "On the role of distance for outward FDI," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(2), pages 375-389, June.
- 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.
- Steven Globerman & Daniel Shapiro, 2003. "Governance infrastructure and US foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(1), pages 19-39, January.
- Steven Globerman & Daniel Shapiro, 2004. "Governance Infrastructure and U.S. Foreign Direct Investment," International Finance 0404008, EconWPA.
- 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.
- G.J.M. Linders, 2006. "Estimation of the Gravity Equation of Bilateral Trade in the Presence of Zero Flows," ERSA conference papers ersa06p746, European Regional Science Association.
- 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.
- 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.
- David W Loree & Stephen E Guisinger, 1995. "Policy and Non-Policy Determinants of U.S. Equity Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(2), pages 281-299, June.
- Baltagi, Badi H. & Egger, Peter & Pfaffermayr, Michael, 2007. "Estimating models of complex FDI: Are there third-country effects?," Journal of Econometrics, Elsevier, vol. 140(1), pages 260-281, September.
- Badi H. Baltagi & Peter Egger & Michael Pfaffermayr, 2005. "Estimating Models of Complex FDI: Are There Third-Country Effects?," Center for Policy Research Working Papers 73, Center for Policy Research, Maxwell School, Syracuse University.
- Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 291-307, June.
- Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
- Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," ULB Institutional Repository 2013/7364, ULB -- Universite Libre de Bruxelles.
- World Bank, 2012. "World Development Indicators 2012," World Bank Publications, The World Bank, number 6014, October.
- James R. Hines, Jr., 1995. "Forbidden Payment: Foreign Bribery and American Business After 1977," NBER Working Papers 5266, National Bureau of Economic Research, Inc.
- Abhijit V. Banerjee, 1997. "A Theory of Misgovernance," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1289-1332.
- Dahlström, Tobias & Johnson, Andreas, 2007. "Bureaucratic Corruption, MNEs and FDI," Working Paper Series in Economics and Institutions of Innovation 82, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Azmat Gani, 2007. "Governance and foreign direct investment links: evidence from panel data estimations," Applied Economics Letters, Taylor & Francis Journals, vol. 14(10), pages 753-756.
- Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, vol. 87(4), pages 520-544, September.
- Cuervo-Cazurra, Alvaro, 2008. "Better the devil you don't know: Types of corruption and FDI in transition economies," Journal of International Management, Elsevier, vol. 14(1), pages 12-27, March.
- Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages 632-652, November.
- Sotirios Bellos & Turan Subasat, 2012. "Corruption And Foreign Direct Investment: A Panel Gravity Model Approach," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 565-574, October.
- Blonigen, Bruce A. & Davies, Ronald B. & Waddell, Glen R. & Naughton, Helen T., 2007. "FDI in space: Spatial autoregressive relationships in foreign direct investment," European Economic Review, Elsevier, vol. 51(5), pages 1303-1325, July.
- Bruce A. Blonigen & Ronald B. Davies & Glen R. Waddell & Helen T. Naughton, 2004. "FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment," NBER Working Papers 10939, National Bureau of Economic Research, Inc.
- 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.
- Jensen, Nathan M., 2003. "Democratic Governance and Multinational Corporations: Political Regimes and Inflows of Foreign Direct Investment," International Organization, Cambridge University Press, vol. 57(03), pages 587-616, June.
- Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
- Lien, Da-Hsiang Donald, 1986. "A note on competitive bribery games," Economics Letters, Elsevier, vol. 22(4), pages 337-341.
- Li, Quan & Resnick, Adam, 2003. "Reversal of Fortunes: Democratic Institutions and Foreign Direct Investment Inflows to Developing Countries," International Organization, Cambridge University Press, vol. 57(01), pages 175-211, December.
- Henisz, Witold J, 2000. "The Institutional Environment for Multinational Investment," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(2), pages 334-364, October. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ioe:cuadec:v:50:y:2013:i:1:p:107-131. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jaime Casassus)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.