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The Spatial Interdependence of FDI in Latin America

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  • Blanco, Luisa R.

Abstract

Using a sample of 17 Latin American countries, with observations during 1986–2006, two forms of spatial interdependence of foreign direct investment (FDI) are explored: (1) surrounding market potential, and (2) spatial autocorrelation. We find that surrounding market potential has a positive significant effect on net FDI, but there is no evidence that FDI is spatially autocorrelated. Other factors that show a significant positive effect on FDI include control of corruption and exports of raw materials. When considering only FDI inflows from the US, we find that FDI is spatially autocorrelated, and that surrounding market potential is not significant.

Suggested Citation

  • Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.
    • Handle: RePEc:eee:wdevel:v:40:y:2012:i:7:p:1337-1351
    DOI: 10.1016/j.worlddev.2012.02.003
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    8. Zhou, Jing, 2023. "A double-edged sword: Chinese direct investment in Latin America," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 234-249.
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    11. Vianna, Andre C. & Mollick, Andre V., 2018. "Institutions: Key variable for economic development in Latin America," Journal of Economics and Business, Elsevier, vol. 96(C), pages 42-58.
    12. Alamá-Sabater, Luisa & Heid, Benedikt & Jiménez-Fernández, Eduardo & Márquez-Ramos, Laura, 2016. "What drives interdependence of FDI among host countries? The role of geographic proximity and similarity in public debt," Economic Modelling, Elsevier, vol. 58(C), pages 466-474.
    13. Chih, Yao-Yu & Demir, Firat & Hu, Chenghao & Liu, Junyi & Shen, Hewei, 2023. "A spatial analysis of local corruption on foreign direct investment: Evidence from Chinese cities," European Journal of Political Economy, Elsevier, vol. 79(C).
    14. Lisha He & Mia M Bennett & Ronghao Jiang, 2022. "The uneven geography of real estate investment by Mainland Chinese state-owned and private enterprises in the U.S.: Local market conditions, migration, and ethnic networks," Environment and Planning A, , vol. 54(4), pages 653-675, June.
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    16. Ning, Lutao & Wang, Fan & Li, Jian, 2016. "Urban innovation, regional externalities of foreign direct investment and industrial agglomeration: Evidence from Chinese cities," Research Policy, Elsevier, vol. 45(4), pages 830-843.

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