Competition between Latin America and China for US direct investment.

De la Cruz Gallegos, Jose Luis and Ivanova Boncheva, Antonina and Ruiz-Porras, Antonio (2008): Competition between Latin America and China for US direct investment. Forthcoming in: Global Economy Journal

Abstract

There is a belief that the Chinese economy competes with the Latin-American ones for investment flows. Here we analyze the determinants of the US FDI outflows to the most representative Latin-American economies. We develop such assessment with a double-procedure cointegration analysis based on the time-series methodologies of Toda and Yamamoto (1995) and Liu, Song and Romilly (1997). The results suggest that long-run investment to the Latin-American region mainly depends on the performance of the US economy. Furthermore, they suggest the existence of a substitution effect between the Latin American countries and China for US investment flows.

• Item Type: MPRA Paper
• Language: English
• Keywords: FDI; Latin America; China; US; Cointegration
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

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