2011
DOI: 10.1111/j.1468-2478.2011.00690.x
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Foreign Direct Investment in Latin America: The Importance of Judicial Strength and Rule of Law1

Abstract: An extensive literature has emerged recently that investigates the determinants of foreign direct investment (FDI) in developing regions of the world, including Latin America. Much of this work has focused on whether authoritarian or democratic rule is better for attracting FDI. Curiously, little attention has been devoted to unpacking regime type to see whether specific political institutional variables related to judicial strength and adherence to the rule of law are important FDI determinants. Based on pane… Show more

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Cited by 127 publications
(74 citation statements)
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References 50 publications
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“…Staats and Biglaiser (2012) find that judicial strength and rule of law are important determinants of FDI in Latin American countries. Olson (1996) always argued in favor of a strong and independent legal system.…”
Section: Literature Reviewmentioning
confidence: 87%
See 1 more Smart Citation
“…Staats and Biglaiser (2012) find that judicial strength and rule of law are important determinants of FDI in Latin American countries. Olson (1996) always argued in favor of a strong and independent legal system.…”
Section: Literature Reviewmentioning
confidence: 87%
“…An independent judiciary ensures that future changes of government policies will not affect business arbitrarily. A court-enforced constitutionalization of rights makes change more difficult, costly and slow, hence, boosts confidence of the investors (Staats and Biglaiser 2012). Moreover, strong judicial system also ensures political stability, which foreign investors always favor and is expected to enhance growth.…”
Section: Literature Reviewmentioning
confidence: 99%
“…10 The dominant view is that good governance aids FDI (Ayal and Karras 1996;Globerman and Shapiro 2003;Biglaiser and DeRouen 2006;Gani 2007;Staats and Biglaiser 2012). 11 However, poor governance can also lead to more foreign investments if combined with high levels of corruption (Bellos and Subasat 2012).…”
Section: Research Hypothesesmentioning
confidence: 99%
“…Also, this indicator is very reliable as governance indicators. Because a number of researchers utilized [14]- [18]. In this study, we use the average value for the year of governance six variables.…”
Section: ) Governance Factormentioning
confidence: 99%