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U.S. Foreign Direct Investment In Food Processing Industries Of Latin American Countries: A Dynamic Approach

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  • Skripnitchenko, Anatoliy
  • Koo, Won W.

Abstract

In this report, we apply a dynamic cost minimization model of U.S. foreign direct investment in food processing industries to nine Latin American countries. Estimation of the first order condition (Euler equation) using a consistent rational expectation assumption showed that dynamic structure explains the investment process in food processing industries quite well. U.S. food processors in Latin America are driven by the host country?s level of demand and by labor cost considerations. They can adjust their investment position quickly. We also quantified short and long-run effects of shocks to exogenous variables on foreign direct investment position.

Suggested Citation

  • Skripnitchenko, Anatoliy & Koo, Won W., 2005. "U.S. Foreign Direct Investment In Food Processing Industries Of Latin American Countries: A Dynamic Approach," Agribusiness & Applied Economics Report 23533, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaae:23533
    DOI: 10.22004/ag.econ.23533
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    Cited by:

    1. Jin, S. & Guo, H. & Wang, H.H. & Delgado, M.S., 2018. "Going global : determinants of Chinese outward foreign direct investment in the agri-food industry," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277186, International Association of Agricultural Economists.
    2. Becker, Anthony D. & Judge, Rebecca P., 2012. "Measuring the Effects of Decoupled Payments on Indica Rice Production Under the 1996 and 2002 Farm Bills," Working Papers 120073, St. Olaf College, Department of Economic.
    3. Anthony Becker & Rebecca Judge, 2014. "Evidence of Distortionary Effects of Decoupled Payments in U.S. Indica Rice Production," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(3), pages 265-275, September.
    4. Anthony D. Becker & Rebecca P. Judge, 2012. "Measuring the Effects of Decoupled Payments on Indica Rice Production Under the 1996 and 2002 Farm Bills," Working Papers 201201, St. Olaf College, Department of Economics.
    5. Cai, Xiaowei & Stiegert, Kyle W., 2012. "Modal FDI Strategies in Asia-Pacific Region," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(2), pages 1-14, May.

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    Keywords

    International Relations/Trade;

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