Impact of Pension Privatization on Foreign Direct Investments: A Study of the Latin American Experiment
We explore the causal effect of market-oriented pension reform on net foreign direct investment (FDI) inflows in Latin America, which has experienced a wave of pension privatization and FDI in the last two decades. With our balanced panel of 17 countries over the 1991-2006 period, we implement fixed effects models, controlling for the endogenous decision to enacted full or partial privatization of the public pension system and several other covariates whose choice is informed by the rich empirical literature on FDI. Our econometric results indicate that privatization triggers a significant increase in net FDI inflows within a year of reform implementation and that the effect does not wane over time. We estimate that privatization increases FDI as a percentage of GDP by between 41 and 47%, ceteris paribus.
|Date of creation:||2010|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
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.:
- Chakrabarti, Avik, 2001. "The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-113.
- Raymond Vreeland, James, 2002. "The Effect of IMF Programs on Labor," World Development, Elsevier, vol. 30(1), pages 121-139, January.
- de Janvry, Alain & Finan, Frederico & Sadoulet, Elisabeth & Vakis, Renos, 2006. "Can conditional cash transfer programs serve as safety nets in keeping children at school and from working when exposed to shocks?," Journal of Development Economics, Elsevier, vol. 79(2), pages 349-373, April.
- Kolstad, Ivar & Villanger, Espen, 2008.
"Determinants of foreign direct investment in services,"
European Journal of Political Economy,
Elsevier, vol. 24(2), pages 518-533, June.
- Ivar Kolstad & Espen Villanger, 2004. "Determinants of foreign direct investment in services," CMI Working Papers WP 2004: 2, CMI (Chr. Michelsen Institute), Bergen, Norway.
- Catal N, Mario, 2004. "Pension funds and corporate governance in developing countries: what do we know and what do we need to know?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 3(02), pages 197-232, July.
- Catalan, Mario & Impavido, Gregorio & Musalem, Alberto R., 2000. "Contractual savings or stock market development - Which leads?," Policy Research Working Paper Series 2421, The World Bank. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ags:aaea10:61206. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.