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Determinants of FDI in Latin America

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  • Luis C. Nunes
  • Jose Oscátegui

    () (Departamento de Economía- Pontificia Universidad Católica del Perú)

Abstract

In this paper we study the determinants of inflows of foreign capital in Latin American countries. We consider the usual factors included in other studies in the literature: market size, infrastructure development, and wages. To obtain a improved measure of market size we adjust GDP by a poverty factor. In addition, we consider indicators of openness of the economy, macroeconomic stability, human capital and the importance of natural resources. We also studied the effects of privatizations. The results obtained provide important guidelines on how a country can attract more foreign direct investment.

Suggested Citation

  • Luis C. Nunes & Jose Oscátegui, 2006. "Determinants of FDI in Latin America," Documentos de Trabajo / Working Papers 2006-252, Departamento de Economía - Pontificia Universidad Católica del Perú.
  • Handle: RePEc:pcp:pucwps:wp00252
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    File URL: http://files.pucp.edu.pe/departamento/economia/DDD252.pdf
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    Cited by:

    1. Pamela Coke Hamilton & Yvonne Tsikata & Emmanuel Pinto Moreira, 2009. "Accelerating Trade and Integration in the Caribbean : Policy Options for Sustained Growth, Job Creation, and Poverty Reduction," World Bank Publications, The World Bank, number 2652.
    2. Folorunso S. Ayadi, 2010. "Sectoral analysis of Foreign Direct Investment and economic growth in Nigeria," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 3(4), pages 327-340.
    3. Azam, Muhammad & Khan, Hashim & Hunjra, Ahmed Imran & Ahmad, H. Mushtaq & Chani, Muhammad Irfan, 2011. "Institutions, macroeconomic policy and foreign direct investment: South Asian countries case," MPRA Paper 32480, University Library of Munich, Germany.

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