Crime, Institutions and Sector-Specific FDI in Latin America

37 Pages Posted: 20 May 2015 Last revised: 10 Jun 2016

See all articles by Luisa R. Blanco

Luisa R. Blanco

Pepperdine University School of Public Policy

Isabel Ruiz

Harris Manchester College, University of Oxford

W. Charles Sawyer

University of Southern Mississippi - College of Business Administration

Rossitza B. Wooster

Portland State University

Date Written: June 9, 2016

Abstract

This article looks at the impact of crime and institutions on FDI into Latin America and the Caribbean during the 1996-2010 period. FDI is disaggregated into primary, secondary and tertiary sectors and three variables related to violent crime are used: homicides, crime victimization, and organised crime. We find that the significance of institutions disappears with the presence of crime. The impact of crime on FDI depends on the sector and types of crime considered. Higher homicide rates are associated with less FDI in the secondary while organised crime reduces tertiary sector FDI. Crime victimization has a significant negative impact on the tertiary and in some estimations of the secondary sector. Crime has no impact on primary sector FDI.

Keywords: Foreign Direct Investment, sector specific FDI, crime, institutions, Latin America

JEL Classification: F21, F23, O19

Suggested Citation

Blanco, Luisa R. and Ruiz, Isabel and Sawyer, W. Charles and Wooster, Rossitza B., Crime, Institutions and Sector-Specific FDI in Latin America (June 9, 2016). Available at SSRN: https://ssrn.com/abstract=2607682 or http://dx.doi.org/10.2139/ssrn.2607682

Luisa R. Blanco (Contact Author)

Pepperdine University School of Public Policy ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States

Isabel Ruiz

Harris Manchester College, University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

W. Charles Sawyer

University of Southern Mississippi - College of Business Administration ( email )

Hattiesburg, MS 39406
United States
601-266-4489 (Phone)
601-266-4410 (Fax)

Rossitza B. Wooster

Portland State University ( email )

Department of Economics
P.O.Box 751
Portland, OR 97207
United States
503.725.3944 (Phone)
503.725.3945 (Fax)

HOME PAGE: http://web.pdx.edu/~wooster/

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