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Foreign direct investment in Latin America and the Caribbean: an empirical analysis

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  • Kevin Williams

Abstract

Competition for foreign direct investment (FDI) among developing countries has intensified in recent years. Using a sample of 68 developing countries across different regions, with data from 1975-2005, this paper investigates whether Latin America and the Caribbean (LAC) differs from non-LAC regions in regard to determinants of FDI; the evidence suggests that there are differences. In particular, the stock of infrastructure attracts FDI to LAC and constraints on the executive and high debt discourage FDI to non-LAC. These findings are robust to sample size, different estimators, endogeneity, and country fixed effects.

Suggested Citation

  • Kevin Williams, 2015. "Foreign direct investment in Latin America and the Caribbean: an empirical analysis," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 52(1), pages 57-77, May.
    • Handle: RePEc:ioe:cuadec:v:52:y:2015:i:1:p:57-77
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    1. Shah, Mumtaz Hussain, 2016. "The Effect of Macroeconomic Stability on Inward FDI in African Developing Countries," MPRA Paper 82014, University Library of Munich, Germany.
    2. Biyase Mduduzi & Rooderick September, 2018. "Determinants of FDI in BRICS Countries: Panel Data Approach," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 63(2), pages 35-48, August.
    3. Soto, Gonzalo & Jardon, Carlos M. & Martinez-Cobas, Xavier, 2024. "FDI and income inequality in tax-haven countries: The relevance of tax pressure," Economic Systems, Elsevier, vol. 48(1).
    4. Borges, Michelle da Silva & Calegario, Cristina Lelis Leal & Campos Pereira Bruhn, Nádia, 2021. "Industrial policy, economic growth and international engagement: a comparison of selected countries," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    5. Keoudone KEOTHEPHAR & Vilayvanh SRITHILAT, 2024. "Assessing the Key Drivers of Sustainable Economic Growth in Laos: Emphasis on Infrastructure Investment," International Journal of Science and Business, IJSAB International, vol. 32(1), pages 1-15.
    6. Yosra Saidi & Anis Ochi & Samir Maktouf, 2023. "FDI inflows, economic growth, and governance quality trilogy in developing countries: A panel VAR analysis," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 426-449, April.

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    More about this item

    Keywords

    FDI; infrastructure; constraints on the executive; debt; Latin America and the Caribbean;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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