Ponce, Aldo (2010): Foreign Direct Investment and Civil Rights: Testing Decreasing Returns to Civil Rights.
Download (267kB) | Preview
In this paper, I examine the effectiveness of improvements in political and civil rights for attracting foreign direct investment flows (FDI) into democracies. I contend that advances in the quality of democracy – specifically those concerning civil rights – present positive but decreasing marginal returns in attracting FDI inflows. I empirically prove this proposition by using panel data regressions within the Latin American and Eastern European contexts from periods following their democratization (1991-2003).
|Item Type:||MPRA Paper|
|Original Title:||Foreign Direct Investment and Civil Rights: Testing Decreasing Returns to Civil Rights|
|Keywords:||foreign direct investment, civil rights, democratization, developing nations, Latin America, Eastern Europe|
|Subjects:||K - Law and Economics > K1 - Basic Areas of Law > K12 - Contract Law
K - Law and Economics > K0 - General > K00 - General
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements
K - Law and Economics > K1 - Basic Areas of Law > K11 - Property Law
K - Law and Economics > K3 - Other Substantive Areas of Law > K31 - Labor Law
P - Economic Systems > P5 - Comparative Economic Systems > P52 - Comparative Studies of Particular Economies
|Depositing User:||Dr ALDO PONCE|
|Date Deposited:||13 Apr 2010 02:09|
|Last Modified:||08 Oct 2016 12:31|
Bengoa, Marta, and Blanca Sanchez-Robles. 2003. Foreign direct investment, economic freedom and growth: new evidence from Latin America. European Journal of Political Economy, 19, No. 3, pp. 529-45.
Besley, Timothy, and Robin Burgess. 2004. Can labour regulation hinder economic performance? The Quarterly Journal of Economics, vol. 119 (1), pp 91-134.
Bevan, Alan, and Saul Estrin. 2000. The Determinants of Foreign Direct Investment in Transition Economies. University of Michigan, William Davidson Institute, DP 342.
Biglaiser, Glen, and Michelle Danis. 2002. Privatization and democracy: the effects of regime type in the developing world. Comparative Political Studies, 35, 83-102.
Biglaiser, Glen, and Karl DeRouen. 2006. Economic reforms and inflows of foreign direct investment in Latin America. Latin American Research Review, 41, 1.
Birch, Melissa. 1991. Changing patterns of foreign investment in Latin America. Latin American Business Review, 31, 141-158.
Borensztein, Eduardo, Jose De Gregorio, and Jong-Wha Lee. 1998. How Does Foreign Direct Investment Affect Economic Growth?, Journal of International Economics, 45, pp. 115–35.
Botero, Juan, Simeon Djankov, Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Schleifer. 2004. The regulation of labor, The Quarterly Journal of Economics, Volume 119, Issue 4.
Cameron, David. 1978. The Expansion of the Public Economy: A Comparative Analysis. American Political Science Review, 72 (December): 1243–61.
Campos, Nauro, and Yuko Kinoshita. 2008. Foreign direct investment and structural reforms: evidence from Eastern Europe and Latin America. IMF Working paper/08/26.
Chull Shin, Doh. 1994. On the third wave of democratization: A synthesis and evaluation of recent theory and research. World Politics, 47, 1, 135-170.
Dahl, Robert. 1971. Polyarchy: Participation and Opposition. New Haven: Yale University Press
Delton, Jennifer. 2002. Making Minnesota Liberal: Civil Rights and the Transformation of the Democratic Party. Minneapolis: University of Minnesota Press.
Epstein, David, Robert Bates, Jack Goldsone, Ida Kirstensen, and Sharyn O’Halloran. 2005. Democratic Transitions. SSRN, Working Paper Series.
Fisher, R. A. 1932. Statistical methods for research workers. Edinburgh: Oliver & Boyd.
Fonte, John. 1997. The tragedy of civil rights. Society, Jul-Aug97, Vol. 34, 5.
Goldberg, L. and M. Klein. 1997. Foreign direct investment, trade and real exchange rates linkages in Southeast Asia and Latin America. Working paper 6344. National Bureau of Economic Research.
Greene, William. 2003. Econometric Analysis. 5th ed. Upper Saddle River, NJ: Prentice Hall.
Grosse, Robert. 2001. Intra-and Extraregional Foreign Direct Investment in Latin America. In Andres Franco, ed., Financing for development in Latin America and the Caribbean. New York: United Nations University Press.
Haggard, Stephan and Mathew D. McCubbins, eds. 2001. Presidents, Parliaments and Policy. Cambridge; New York: Cambridge University Press.
Huntington, Samuel. 1968. Political order in changing societies. New Haven, Yale University Press.
Huntington, Samuel. 1991. The third wave: Democratization in the late twentieth century. Oklahoma: University of Oklahoma Press.
International Monetary Fund (IMF), International Financial Statistics.
Javorcik, Beata, and Mariana Spatareaunu. 2004. Do foreign investors care about labour market regulations?, World Bank Policy Research Review Paper 3275.
Jensen, Nathan. 2003. Democratic governance and multinational corporations: political regimes and inflows of foreign direct investment. International Organization, 57, 587-616.
Jensen, Nathan. 2008. Political risk, democratic institutions, and foreign direct investment. The Journal of Politics, 70, 4, 1040-1052.
Jessup, David. 1999. Dollars and democracy: The Post-Cold War decline in developing democracies´ share of trade and investment markets. New Economy Information Service, November.
Kotlowski, Dean. 2001. Nixon’s Civil Rights: Politics, Principle, and Policy. Cambridge, Mass.: Harvard University Press.
Layton, Azza. 2000. International politics and civil rights policies in the United States, 1941-1960. New York: Cambridge University Press.
Leiderman, L. and A. E. Thorne (1996). The 1994 Mexican crisis and its aftermath: what are the main lessons? In G.A. Calvo, M. Goldstein and E. Hochreiter (eds.), Private capital flows to emerging markets after the Mexican crisis. Washington, D.C: Institute for International Economics.
Leff, N. 1964. Economic development through bureaucratic corruption. American Behavioral Scientist, 8-14.
Lewis-Beck, Michael. 1988. Economics and Elections: The Major Western Democracies. Ann Arbor: University of Michigan Press
Li, Quan, and Adam Resnick. 2003. Reversal of fortunes: democratic institutions and foreign direct investment inflows to developing countries. International Organization, 57, 175-211.
Li, Quan. 2006. Democracy, Autocracy, and Tax Incentives to Foreign Direct Investment: A Cross-National Analysis. The Journal of Politics, 68, 1, 62-74.
Li, Quan. 2009. Democracy, Autocracy, and Expropriation of Foreign Direct Investment. Comparative Political Studies, 42, 8, 1098-1127.
Maddala, G.S. 2001. Introduction to Econometrics. 3rd ed. New York: Wiley.
Maddala, G.S. and Shaowen Wu. 1999. A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, Special Issue.
Murphy, K., Shleifer, A., and Vishny, R. 1991. The allocation of talent: implications for growth. Quarterly Journal of Economics, 503-530.
Noorbakhsh, Farhad and Alberto Paloni. 2001. Human capital and FDI inflows to developing countries: new empirical evidence, World Development, Vol. 29, 9, 1593-1610.
North, Douglas. 1990. Institutions, institutional change, and economic performance. New York: Cambridge University Press.
Oneal, John. 1994. The affinity of foreign investors for authoritarian regimes. Political Research Quarterly, 47, 565-589.
Phillips, Peter, and Pierre Perron. 1988. Testing for a unit root in time series regression. Biometrika, 75, 2, 335-346.
Ponce, Aldo. 2008. Apertura comercial e inversión directa extranjera: el impacto de los tratados de libre comercio en Latinoamérica, Revista Apuntes, No. 58-59.
Przeworski, Adam, et. al. 2000. Democracy and Development. Political Institutions and Well-Being in the World, 1950-1990. NY: Cambridge University Press.
Puddington, Arch. 2007. The pushback against democracy. Journal of Democracy, Vol. 18, 2.
Putnam, Robert. 1994. Making democracy work: civil traditions in modern Italy. Princeton: Princeton University Press. Putnam, Robert. 2000. Bowling Alone. The collapse and revival of American community, New York: Simon and Schuster.
Resmini, Laura. 2000. The Determinants of Foreign Direct Investment in the CEECs , Economics of Transition, 8 (3), pp. 665–89.
Ricci, David. 1984. The Tragedy of Political Science: Politics, Scholarship, and Democracy. New Haven: Yale University Press.
Rodrick, Dani. 1996. Understanding economic policy reform. Journal of Economic Literature, 34, 9-41.
Roubini, Nouriel, and Sachs, Jeffrey. 1988. Political and economic determinants of budget deficits in the industrial democracies. NBER Working Paper, No. W2682
Rueschemeyer, Dietrich, Evelyne Stephens Huber, and Stephens John. 1992. Capitalist development and democracy. Chicago: Chicago University Press.
Schneider, F. and B.S. Frey. 1985. Economic and political determinants of foreign direct investment. World Development, 13, pp. 161-75.
Schumpeter, Joseph. 1942. Capitalism, Socialism and Democracy. New York: Harper & Row.
Shleifer, A., and Vishny, R. (1993). Corruption. Quarterly Journal of Economics, 109, 599-617.
UNCTAD. 2005. United Nations Conference on Trade and Development.
United Nations Statistics.
World Bank, Database of political institutions.