U.S. DIRECT INVESTMENT TO MEXICO: POLITICS, ECONOMICS, AND NAFTA

Guy V.G. Stevens

Contemporary Economic Policy, 1998, vol. 16, issue 2, 197-210

Abstract: The goal of this paper is to determine whether the recent opening of the Mexican economy caused a significant change in the investment behavior of U.S. multinational firms. The first finding is that a real investment function that explained the data well through 1989 shifted dramatically thereafter. Tests indicate that the probable causes of this shift were (i) the relaxation of Mexican restrictions on direct investment after 1989 and (ii) anticipatory investment behavior after the positive conclusion of the NAFTA negotiations.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:bla:coecpo:v:16:y:1998:i:2:p:197-210

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