The effect of uncertainty on foreign direct investment: The case of Mexico

Gabriela López Noria and Juan José Zamudio Fernández
Additional contact information
Gabriela López Noria: Banco de México
Juan José Zamudio Fernández: Banco de México

Estudios Económicos, 2018, vol. 33, issue 1, 117-149

Abstract: This paper investigates the effect of uncertainty on FDI flows into the Mexican manufacturing sector during the period 2007-2015. Using a panel of manufacturing subsectors, we estimate a model by System GMM that includes domestic and external factors, as well as idiosyncratic and aggregate uncertainty measures as explicative variables. We also performsome simulations to assess the size of the uncertainty effect on FDI flows. The main results show that uncertainty discourages FDI flows into the Mexican manufacturing sector during this period. We also find that idiosyncratic uncertainty measures are more important in explaining FDI flows than aggregate uncertainty measures.

Keywords: uncertainty; foreign direct investment; expectations; manufacturing (search for similar items in EconPapers)
JEL-codes: D80 D84 F21 L60 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/355/358 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:emx:esteco:v:33:y:2018:i:1:p:117-149

Access Statistics for this article

More articles in Estudios Económicos from El Colegio de México, Centro de Estudios Económicos Contact information at EDIRC.
Bibliographic data for series maintained by Ximena Varela ().