Foreign Direct Investment in Latin America During the Emergence of China and India: Stylized Facts

28 Pages Posted: 20 Apr 2016

See all articles by Marcelo Olarreaga

Marcelo Olarreaga

University of Geneva; Centre for Economic Policy Research (CEPR)

Daniel Lederman

World Bank - Latin America and Caribbean Region

Javier Cravino

University of California, Los Angeles

Date Written: September 1, 2007

Abstract

In spite of the growing concerns about foreign direct investment being diverted from Latin America to China and India, the best available data show that Latin America has performed relatively well since 1997. Foreign capital stocks from OECD countries and the United States in particular in China and India are still far from those in the largest Latin American economies. The evidence shows that foreign capital stocks in China increased more than in Latin America during 1990-1997, but not as much since 1997. In fact, Latin America has actually performed better than China since 1997 given its lack of relative growth. The growth of foreign capital stocks in India was more stable than in China. Nonetheless, after controlling for shocks emanating from the source countries and bilateral distance between source and host countries, this paper finds a significant change in foreign capital stocks relative to China between 1990 and 1997, but no change relative to India.

Keywords: Debt Markets, Transport and Trade Logistics, Common Carriers Industry, Corporate Law

Suggested Citation

Olarreaga, Marcelo and Lederman, Daniel and Cravino, Javier, Foreign Direct Investment in Latin America During the Emergence of China and India: Stylized Facts (September 1, 2007). World Bank Policy Research Working Paper No. 4360, Available at SSRN: https://ssrn.com/abstract=1016256

Marcelo Olarreaga (Contact Author)

University of Geneva ( email )

40 Boulevard du Pont-d'Arve
Genève, CH - 1205
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Daniel Lederman

World Bank - Latin America and Caribbean Region ( email )

1818 H Street NW
Washington, DC 20433
United States

HOME PAGE: http://sites.google.com/site/danielledermanworldbank/

Javier Cravino

University of California, Los Angeles

Box 951477
Los Angeles, CA 90095-1477
United States

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