Competition between Latin America and China for US direct investment

Jose Luis De la Cruz Gallegos, Antonina Ivanova Boncheva and Antonio Ruiz-Porras

MPRA Paper from University Library of Munich, Germany

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 assessment 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)
JEL-codes: F21 F40 (search for similar items in EconPapers)
Date: 2008-02-01
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Journal Article: Competition between Latin America and China for US Direct Investment (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:8950

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