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Does China have an impact on foreign direct investment to Latin America?

  • Daniel Santabarbara

    (Bank of Spain)

  • Alicia Garcia-Herrero

    (Bank of Spain)

We analyze empirically whether the emergence of China as a large recipient of FDI has affected the amount of FDI received by Latin American countries. For the longest time span possible given data availability (from 1984 to 2001), we do not find a substitution from Latin American inward FDI to China, when other relevant factors are taken into account. However, concentrating on the last few years (from 1995 to 2001), when FDI boomed worldwide and negotiations for China’s WTO membership accelerated, the “Chinese” effect becomes highly significant. Assessing the impact country by country, China’s inward FDI appears to have hampered that of Mexico and Colombia.

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Paper provided by EconWPA in its series International Finance with number 0508008.

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Length: 25 pages
Date of creation: 22 Aug 2005
Date of revision:
Handle: RePEc:wpa:wuwpif:0508008
Note: Type of Document - pdf; pages: 25
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