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Foreign direct investment flows: an analysis for Argentina, Brazil, Chile and Mexico based on the Grubel-Lloyd index

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  • Vartanian, Pedro Raffy
  • Junior, Álvaro Alves de Moura
  • Racy, Joaquim Carlos

Abstract

This article assesses the importance of using the Grubel-Lloyd (GL) index as a tool to reveal trends in foreign direct investment (FDI). The index was developed to further the study of a fundamental question in international political economy: how FDI affects economies, whether individual or regional, and becomes a general framework indicator of regional behaviour. The index is applied to the four largest economies in Latin America (Argentina, Brazil, Chile and Mexico) in the period 1995–2016, with a view to demonstrating the importance of FDI for the region. However, the “behaviour” of FDI may be different for each country. The article discusses characteristics in each of these countries that differ from those found in the same indicator for a bloc consisting of the developed countries plus China, for which the index as calculated is higher and varies little during the period analysed.

Suggested Citation

  • Vartanian, Pedro Raffy & Junior, Álvaro Alves de Moura & Racy, Joaquim Carlos, 2021. "Foreign direct investment flows: an analysis for Argentina, Brazil, Chile and Mexico based on the Grubel-Lloyd index," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    • Handle: RePEc:ecr:col070:47525
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    3. Obstfeld, Maurice, 2012. "Financial flows, financial crises, and global imbalances," Journal of International Money and Finance, Elsevier, vol. 31(3), pages 469-480.
    4. Strange, Susan, 1979. "The management of surplus capacity: or how does theory stand up to protectionism 1970s style?," International Organization, Cambridge University Press, vol. 33(3), pages 303-334, July.
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