The Influence of the Brazil Cost in the Direct Investments in the Country from 2012 to 2018

Abstract

Widely used by economists in Brazil; the “Brazil Cost” concept refers to costs that hinder development, as they burden production, removing its competitive character, indispensable in a globalized economy. Brazil Cost may imply major obstacles to Foreign Direct Investment in the Country (FDI) and consequently impact the country's growth and development. The study evaluated the influence of variables that are part of the Brazil Cost in Foreign Direct Investment over the last six years. For this, the DMA -Dynamic Model Averaging methodology was used, which allowed the modeling of the dependent variable, FDI, as a function of its past and other variables dynamically over time. These results contribute to the evaluation of the assumptions made about the relationship between the components of Brazil Cost and the volume of direct investment in the country.