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

Campos, Nauro F.; Kinoshita, Yuko

Purchase - $8 CEPR Subscribers Download

Add Paper to My Library

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

CEPR Discussion Paper No. DP6690

51 Pages Posted: 10 Jun 2008

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Yuko Kinoshita

International Monetary Fund (IMF); University of Michigan, William Davidson Institute; Centre for Economic Policy Research (CEPR)

There are 4 versions of this paper

Date Written: February 2008

Abstract

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.

Keywords: financial reform, foreign direct investment, Latin America, privatization, trade liberalization, transition economies

JEL Classification: F21, H11, O16

Suggested Citation: Suggested Citation

Campos, Nauro F. and Kinoshita, Yuko, Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America (February 2008). CEPR Discussion Paper No. DP6690, Available at SSRN: https://ssrn.com/abstract=1141012