Regional Integration and Foreign Direct Investment: The Case of Latin America

Vallejo, Hernán; Aguilar, Camila

doi:10.2139/ssrn.393920

Cited by 4 publications

(2 citation statements)

References 21 publications

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“…Another study of the Middle East and North Africa (MENA) region by Abbas and Mosallamy (2016) suggests that along with market openness, infrastructure, and human capital, firms tend to establish in areas which have prior foreign investment presence. In the context of Latin America, Aguilar and Vallejo (2002) found that the size and development of economies, distance between domestic and foreign countries, and common language are some of the socio-economic variables that are positively linked to FDI flows. Azam and Lukman (2010) empirically analyzed the impact of various macroeconomic indicators on FDI inflows in a comparative study of three Asian nations India, Pakistan, and Indonesia for the period 1975 to 2001.…”

Section: Literature Reviewmentioning

confidence: 99%

Regional Distribution of Foreign Direct Investment in India

Chhina

2023

REDR

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The tremendous rise in Foreign Direct Investment (FDI) inflows following the economic reforms in 1991, has been one of the most prominent features shaping the behavior of the Indian economy in the past three decades. The present study is based on secondary data and the objective is to examine the trends in FDI inflows to India following the global financial crisis, for the period 2009-2010 to 2021-2022. Additionally, the distributional pattern of FDI among the regions and states of India is also analyzed, using the data for 30 states/territories. The results reveal that total FDI inflows have increased in substantial amounts over the period from US$ 37,745 million in 2009-2010 to US$ 84,835 million in 2021-2022. Maharashtra and Karnataka have surpassed all other states in FDI equity inflows over the period from October 2019 to September 2022. These two states have commanded 50 percent of the total FDI, whereas the regions in central, eastern, and northeast India have received less than 3 percent of the total FDI equity inflows. Thus, the regional disparities in the distribution of FDI are quite visible post-analysis. It is suggested that government should focus on making investor-friendly policies to tap the potential of regions neglected by foreign investors.

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Section: Literature Reviewmentioning

confidence: 99%

Regional Distribution of Foreign Direct Investment in India

Chhina

2023

REDR

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“…7 Second, by reducing the cost of trading and thus facilitating the exchange of intermediate and finished products among parent firms and their foreign subsidiaries, PTAs are expected to promote vertical FDI among members (Ethier 2001;Levy Yeyati, Stein, and Daude 2003). 8 Along these lines, Vallejo and Aguilar (2002) found that the North American Free Trade Agreement (NAFTA), the Andean Community, and the Central American Common Market (CACM) contributed to an increase in intraregional FDI inflows. Finally, economists and political scientists have emphasized the political economy mechanisms through which PTAs may work to attract foreign investment.…”

Section: Ptas and Their Benefitsmentioning

confidence: 99%

Deep Trade Agreements and Domestic Institutions in the Americas

Gomez-Mera

Varela

2021

Lat. American Res. Rev.

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Preferential trade agreements (PTAs) have spread rapidly around the world since the 1990s. In the Americas, the proliferation of trade agreements with countries from within and beyond the region have resulted in a “spaghetti bowl” of overlapping rules and regulations, some of which address behind-the-border issues such as investment, competition, labor, and environmental standards. Earlier research has linked trade agreements to increased foreign investment inflows. This article argues instead that the effects of PTAs on FDI depend on the domestic institutional capacities of member countries. Domestic institutions condition the benefits and effectiveness of PTAs by influencing governments’ external credibility as well as their ability to implement the agreements they sign. The empirical findings show that weak state capacity exacerbates the spaghetti-bowl effects of multiple, overlapping agreements. Moreover, it is not the quantity but the quality, and more specifically, the depth of trade agreements that matters for attracting FDI.

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Incentives to Attract Foreign Direct Investment in Emerging Economies

Ghoshal

Ghosh

2017

Outward Foreign Direct Investment (FDI) in Emerging Market Economies

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The study delves into a diagnostic check for macroeconomic factors that may cause and explain outward FDI flows to India as a representative of the emerging economies. The seventeen top investing economies to India across the period from 2008-14 reveal that overall FDI outflows, inflation, exchange rate and growth of the economy affect FDI outflows to India in the long run where only exchange rate has a causal effect. Also, the above-mentioned variables except growth along with the size of the economy has significant effect on the extent of FDI flows to India from the economies considered for the study.

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Regional Integration and Foreign Direct Investment: The Case of Latin America

Cited by 4 publications

References 21 publications

Regional Distribution of Foreign Direct Investment in India

Regional Distribution of Foreign Direct Investment in India

Deep Trade Agreements and Domestic Institutions in the Americas

Incentives to Attract Foreign Direct Investment in Emerging Economies

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