Structural Reforms, Financial Liberalization, and Foreign Direct Investment

Nauro Campos and Yuko Kinoshita

IMF Staff Papers, 2010, vol. 57, issue 2, 326-365

Abstract: The relationship between structural reforms and foreign direct investment (FDI) inflows is complex because different reforms have different impacts and because their complementarities have important yet imperfectly understood effects on FDI inflows. The objective of this paper is to try to extricate these effects, focusing on the dynamics of privatization, trade, and financial liberalization in a large yearly panel of developing countries (Latin America and transition economies) for the period from 1989–2004. The main finding is that of a strong relationship of reforms to FDI and, especially, of financial liberalization. We subject our results to various sensitivity tests and find they are robust to different measures of reforms, split samples, panel estimators (fixed-effects, system generalized method of moments, and differences-in-differences), as well as to endogeneity and omitted variables concerns.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
http://www.palgrave-journals.com/imfsp/journal/v57/n2/pdf/imfsp200917a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/imfsp/journal/v57/n2/full/imfsp200917a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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:pal:imfstp:v:57:y:2010:i:2:p:326-365

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

Access Statistics for this article

More articles in IMF Staff Papers from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().