Competition between Latin America and China for US Direct Investment

Luis De la Cruz Gallegos Jose (), Ivanova Boncheva Antonina () and Antonio Ruiz-Porras
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Luis De la Cruz Gallegos Jose: Tecnológico de Monterrey, Campus Estado de México
Ivanova Boncheva Antonina: Autonomous University of Southern Baja California

Global Economy Journal, 2008, vol. 8, issue 2, 22

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 assessments 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.

Keywords: FDI; Latin America; China; US; cointegration (search for similar items in EconPapers)
Date: 2008
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Working Paper: Competition between Latin America and China for US direct investment (2008)
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DOI: 10.2202/1524-5861.1343

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