The Fishing and Aquaculture Production of Latin America with Respect to the Trade Balance and Foreign Investment

Abstract

In the past few years, despite Latin America having allocated more resources to the innovation and study of the fishing and aquaculture sector, this economic sector still maintains the same level in the short or long term in relation to imports and exports as the axis of the economies in foreign investment with a lasting participation in the Latin American market. For this reason, our study aims to study the impact that fishery production has on the economy of Latin America. Using time series from 1990 to 2020 on fisheries data, the individual and group variables will be studied by using the fixed and random-effects model for estimation. A panel autoregressive econometric technique (Panel-ARDL) will be used to observe the relationship in the long and short term. Our results suggest that in the long term, aquaculture and fishing production have a positive relationship with FDI, that is, a 1% increase in production results in an FDI increase of 1.49%, being significant at 1%, while, in the short term, it was established that the coefficient was 0.32%, being statistically significant. Finally, to validate the short-term model, an ECM was calculated, whose coefficient has a negative sign and is statistically significant.