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

  • Campos, Nauro F


    (Brunel University)

  • Kinoshita, Yuko


    (International Monetary Fund)

This paper investigates the role of structural reforms – privatization, financial reform and trade liberalization – 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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3332.

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Length: 51 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3332
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