Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America
January 1, 2008
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Summary
This paper investigates the role of structural reforms -financial reforms, trade liberalization, and privatization- as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.
Subject: Financial sector development, Foreign direct investment, Privatization, Structural reforms, Trade liberalization
Keywords: FDI flow, FDI inflow, WP
Pages:
38
Volume:
2008
DOI:
Issue:
026
Series:
Working Paper No. 2008/026
Stock No:
WPIEA2008026
ISBN:
9781451868883
ISSN:
1018-5941
