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Competition between Latin America and China for US Direct Investment

Author

Listed:
  • De la Cruz Gallegos Jose Luis

    (Tecnológico de Monterrey, Campus Estado de México)

  • Ivanova Boncheva Antonina

    (Autonomous University of Southern Baja California)

  • Ruiz-Porras Antonio

    (Tecnológico de Monterrey, Campus Ciudad de México)

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 assessments 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.

Suggested Citation

  • De la Cruz Gallegos Jose Luis & Ivanova Boncheva Antonina & Ruiz-Porras Antonio, 2008. "Competition between Latin America and China for US Direct Investment," Global Economy Journal, De Gruyter, vol. 8(2), pages 1-22, June.
    • Handle: RePEc:bpj:glecon:v:8:y:2008:i:2:n:1
    DOI: 10.2202/1524-5861.1343
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    More about this item

    Keywords

    FDI; Latin America; China; US; cointegration;
    All these keywords.

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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