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Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America

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  • Yuko Kinoshita
  • Nauro F. Campos

Abstract

This paper investigates the role of structural reforms -financial reforms, trade liberalization, and privatization- as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.

Suggested Citation

  • Yuko Kinoshita & Nauro F. Campos, 2008. "Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America," IMF Working Papers 2008/026, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/026
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    More about this item

    Keywords

    WP; FDI inflow; FDI flow;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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