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

CEDE Working Paper No. 2002-13

28 Pages Posted: 23 Jun 2003

See all articles by Hernan Vallejo

Hernan Vallejo

Universidad de los Andes

Camila Aguilar

Universidad de los Andes, Colombia - Department of Economics

Date Written: October 2002

Abstract

This document explores the determinants of foreign direct investment. In particular, it considers the effect that the preferential trade agreements have had over FDI flows in Latin America, after controlling for a series of structural, institutional, political and infrastructure variables. The paper gives special attention to the impact of preferential trade agreements on diverting and creating FDI. A panel data analysis is undertaken using a gravity model with FDI data from OECD and ECLAC covering the 1980-1998 period.

Keywords: International trade, Preferential trade agreements, Foreign direct investment, Creation of FDI, Diversion of FDI, Dilution of FDI, Gravity model

JEL Classification: F20, F21, F22

Suggested Citation

Vallejo, Hernan and Aguilar, Camila, Regional Integration and Foreign Direct Investment: The Case of Latin America (October 2002). CEDE Working Paper No. 2002-13, Available at SSRN: https://ssrn.com/abstract=393920 or http://dx.doi.org/10.2139/ssrn.393920

Hernan Vallejo (Contact Author)

Universidad de los Andes ( email )

Carrera 1a No. 18A-10
Bogota
Colombia
57-1-3394949 (Phone)
57-1-3324492 (Fax)

HOME PAGE: http://economia.uniandes.edu.co/vallejo

Camila Aguilar

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

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