Partners or Creditors? Attracting Foreign Investment and Productive Development to Central America and Dominican Republic
Osmel Manzano Mazzali (),
Daniel Artana (),
Mario Cuevas and
No 6820 in IDB Publications (Books) from Inter-American Development Bank
Promotion of foreign direct investment (FDI) has been a priority policy goal in Central America, Panama and Dominican Republic for the past twenty years. Fiscal benefits are among the policies that have been used to attract it. At first sight the model followed has been fruitful. In 2013 the eight countries of the region succeeded in attracting US$ 12.7 billion, the highest level of FDI in their history. But there are question marks about how FDI will perform in future and what the incentives to promote it should be now that World Trade Organization rules on the instruments used to promote FDI in the region have changed. The present book analyzes this situation in depth. Firstly, it reviews the importance of FDI in the region as a source of financing for the external deficit. Then it reviews the findings of international economic research on the impact of FDI on growth and the factors that attract it. It highlights that far from being assured, the benefits of FDI depend on complementary factors which are often not present in the region. Subsequently the book analyzes the international evolution of FDI and the growing importance of multinationals of Latin origin. It then tackles the controversial question of the efficacy of fiscal incentives as a means to attract investment, following an innovative technical approach based on firm level data which questions whether the free zones have had a net positive impact on development. This analysis is complemented by a study of investment promotion policies, which focuses particularly on the Investment Promotion Agencies. Finally, the book outlines the prospects for FDI attraction now the sun has set on strategies based on providing fiscal incentives. It argues that a new strategy should be based on the creation of new skills and capacities through instruments designed to complement productive development policies and thereby generate positive spillovers in the economy.
Keywords: República Dominicana; Nicaragua; employment; promoción de inversiones; productive development policies; empleo; fiscal incentives; Belice; free zones; economic growth; Belize; Panama; El Salvador; crecimiento económico; Costa Rica; Central America; incentivos fiscales; Guatemala; Centroamérica; Honduras; Dominican Republic; clima de negocios; zonas francas; inversion extranjera directa; foreign direct investment; business climate; políticas de desarrollo productivo; investment promotion; Mesoamérica (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
https://publications.iadb.org/publications/english ... minican-Republic.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:idb:idbbks:6820
Access Statistics for this book
More books in IDB Publications (Books) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().