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The Determinants of the U.S. Foreign Direct Investment: Does the Region Matter?


  • Omar M. Al Nasser


This study seeks to explain the variation in U.S. foreign direct investment (FDI) in Latin America and Asia. The analysis focuses on 19 Latin American and Asian countries for the period of 1979-1999. The results show that the variation in the U.S. FDI can largely be attributed to the differences in fundamental economic and social factors such as market size, gross domestic product (GDP) growth, macro-economic stability, the degree of trade openness, and both school enrollment and infrastructure availability. Separating the data into two time periods reveals interesting results about the location decisions for U.S. investors. In addition, the results from the comparison between the two regions show that Latin American countries clearly attract U.S. FDI for different reasons than Asian countries.

Suggested Citation

  • Omar M. Al Nasser, 2007. "The Determinants of the U.S. Foreign Direct Investment: Does the Region Matter?," Global Economic Review, Taylor & Francis Journals, vol. 36(1), pages 37-51.
  • Handle: RePEc:taf:glecrv:v:36:y:2007:i:1:p:37-51 DOI: 10.1080/12265080701217181

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    References listed on IDEAS

    1. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications, The World Bank, number 6889.
    2. Messerlin, Patrick, 2003. "Agriculture in the Doha Agenda," Policy Research Working Paper Series 3009, The World Bank.
    3. L Alan Winters, 2004. "Trade Liberalisation and Economic Performance: An Overview," Economic Journal, Royal Economic Society, vol. 114(493), pages 4-21, February.
    4. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Global impacts of Doha trade reform scenarios on poverty," Policy Research Working Paper Series 3735, The World Bank.
    5. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages 22-49, February.
    6. Hertel, Thomas W. & Winters, L. Alan, 2005. "Poverty impacts of a WTO agreement : synthesis and overview," Policy Research Working Paper Series 3757, The World Bank.
    7. Zhai, Fan & Hertel, Thomas, 2005. "Impacts of the Doha Development Agenda on China : the role of labor markets and complementary education reforms," Policy Research Working Paper Series 3702, The World Bank.
    8. Thomas W. Hertel & L. Alan Winters, 2006. "Poverty and the WTO : Impacts of the Doha Development Agenda," World Bank Publications, The World Bank, number 7411.
    9. L. Alan Winters, 2000. "Trade Liberalisation and Poverty," PRUS Working Papers 07, Poverty Research Unit at Sussex, University of Sussex.
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    Cited by:

    1. Groh, Alexander Peter & Wich, Matthias, 2012. "Emerging economies' attraction of foreign direct investment," Emerging Markets Review, Elsevier, vol. 13(2), pages 210-229.
    2. Iamsiraroj, Sasi & Doucouliagos, Hristos, 2015. "Does growth attract FDI?," Economics Discussion Papers 2015-18, Kiel Institute for the World Economy (IfW).
    3. Nikolaos Antonakakis & Gabriele Tondl, 2011. "Do determinants of FDI to developing countries differ among OECD investors? Insights from Bayesian Model Averaging," FIW Working Paper series 076, FIW.


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