Foreign direct investment in Latin America and the Caribbean: An empirical analysis

Abstract

Competition for foreign direct investment (FDI) among developing countries has intensified in recent years. Using a sample of 68 developing countries across dif ferent regions, with data from 1975-2005, this paper investigates whether Latin America and the Caribbean (LAC) dif fers from non-LAC regions in regard to determinants of FDI; the evidence suggests that there are dif ferences. In particular, the stock of infrastructure attracts FDI to LAC and constraints on the executive and high debt discourage FDI to non-LAC. These findings are robust to sample size, dif ferent estimators, endogeneity, and country fixed ef fects.

Determinants, Boundaries, and Patterns of Canadian Mining Investments in Latin America (1995–2015)

“…This pattern is consistent with the general literature on attractiveness for FDI, where the availability of privatized assets is found to justify important flows to Latin America in the 1990s (Williams, ). This literature also emphasizes that specific market reforms such as capital‐account liberalization, lowered taxation on remittance of profits to headquarters, and dividends to shareholders have a positive effect on FDI flows, particularly in extractive industries (Aleksynska & Havrylchyk, ).…”

“…The sectoral and national ones involve the wider environment where regulatory and macroeconomic variables make possible or even necessary investment beyond borders to benefit the firm (Biglaiser & DeRouen, 2006). Examples of these are the level of competition in the sector, the regulations being applied to it by the government, and the value of the currency (see Aleksynska & Havrylchyk, 2011;Williams, 2015, for surveys on the subject). The international dimensions set the broadest constraints and opportunities such as demand and ongoing prices for the supply this firm is specialized in, as well as the availability of places to invest (Bengoa & Sanchez-Robles, 2003) In political science and political economy, FDI firms or nations might take decisions, influencing firms to make financial commitments in search of access to specific resources or a stake in the global market of a given good (B€ uthe & Milner, 2008).…”

Interrogating the Dilemma of Foreign Aid as a Tool for Economic Development in Latin America in the 20th Century

“…It would be recalled that between the 1950s and the 1970s, States in the Latin American region pursued the economic policy of protectionism. This was replaced with the policy of economic liberalization between the 1970s and the late 1980s (Williams, 2015). Features of the new policy included: reduction of trade barriers, privatization of state-owned enterprises, and removal of controls on prices and capital accounts (Hernández and Parro, 2008;Williams, 2015).…”

“…This was replaced with the policy of economic liberalization between the 1970s and the late 1980s (Williams, 2015). Features of the new policy included: reduction of trade barriers, privatization of state-owned enterprises, and removal of controls on prices and capital accounts (Hernández and Parro, 2008;Williams, 2015). This lack of effective tariff protection for local industries not only exposed the various infant industries in the region to undue cut-throat competition with well-established foreign industries, but it also stifled local investment initiatives in Latin America (Green, 1996).…”

Supply chain and operations strategies for problem-solving in Latin American countries: An introduction

“…Unfortunately, few studies have looked at the supply chain and operations management decision-making process in emerging countries (Avittathur & Jayaram, 2016), specifically in Latin American countries, and explored how they overcome the barriers imposed by the institutional environment. Rare exceptions like Williams (2015) focused on how to capture FDI for Latin America by expanding the stock of infrastructure and its quality. Due to the chronical issues of infrastructure, logistics, cultural and language limitations, managers have been setting up creative ways of defining supply chain and operations strategies to maintain its competitiveness.…”