Ebook Remittances, Foreign Direct Investment And Economic Growth In Latin America And The Caribbean
A large part of the literature about Foreign Direct Investment (FDI) analyzes the associations between FDI and the factors that affect its location. Some of the motivations to explain these relationships are because FDI flows have dramatically increased, and in developing countries, are the most important source of external financing and a channel to transfer technology that contribute to economic growth. Some of the studied relationships include the effects of exchange rate on FDI (e.g., Barrel & Pain, 1996; Cushman, 1985, 1988; and Pain, 2003); the relationship between labor costs and FDI (e.g., Culem, 1988; Cushman, 1987; and Love & Lage-hidalgo, 2000); the association between political aspects and FDI (e.g., Haggard, 1989; Nigh,1985; and Tuman & Emmert, 2004); the effect of trade issues such as openness, trade protection and trade agreements on FDI (e.g., Agosin & Machado, 2006; Barrel & Pain, 1999; and Waldkirch, 2003); and the relationship between host country market size and FDI (e.g., Barrel &Pain, 1996; and Love & Lage-hidalgo, 2000).
In addition, positive associations between FDI and growth include Bengoa and Sanchez-Robles (2003), Campos and Kinoshita (2002), Hansen and Rand (2006), Li and Liu (2005), and Oliva and Rivera-Batiz (2002). The literature on the determinants of FDI reports market size as the most influential determinant of FDI. In this literature, one of the proxies used for market size is per capita GDP and represents the income level of the host country, so that it is likely that an increase in per capita GDP will increase the market size for the goods and services produced by the multinational firms? (MNF) affiliates.
Remittances are also one of the largest capital inflows to developing countries that increase the amount of disposable money for spending on consumption, housing, education and small business formation. Remittance inflows to developing countries increased five-fold during the period 1980-2003 and were the second most important source of external finance in 2003 (International Monetary Fund [IMF], 2005). There is a growing literature that studies the association between remittances and economic growth and development. Positive effects of remittances on economic growth include Acosta, Calderón, Fajnzylber and Lopez (2007); Catrinescu, Leon-Ledesma, Piracha and Quillin (2006); and Guiliano and Ruiz-Arranz (2006). Suggesting remittances? contributions to education are Cox Edwards and Ureta (2003), Hanson and Woodruff (2003), López-Cordova (2006), and Rapoport and Docquier (2005). Suggesting remittances? contributions to productive investments are Griffin (1976), Massey and Parrado (1998), and Woodruff and Zenteno (2001). However, there are also some findings about negative and significant effects of remittances on growth (Chami, Fullenkamp & Jahjah, 2003), or a negative but insignificant impact (IMF, 2005). However, the impact of remittances on growth is still an open discussion.
Contents
Dedication
Acknowledgments
Abstract
Chapter 1 Introduction
1.1 References
Chapter 2 U.S. Foreign Direct Investment Outflows to Latin America and the Caribbean: Remittances and Market Size
2.1 Introduction
2.2 U.S. FDI and Remittances in Latin America and the Caribbean
2.3 Review of Literature
2.4 Methodology and Data
- 2.4.1 The Model
2.4.2 The Data
2.5 Empirical Results
2.6 Conclusions
2.7 References
Chapter 3 Foreign Direct Investment Inflows to Latin America and the Caribbean: Remittances and Market Size
3.1 Introduction
3.2 FDI and Remittances in Latin America and the Caribbean
3.3 Review of Literature
3.4 Methodology and Data
- 3.4.1 The Model
3.4.2 The Data
3.5 Empirical Results
3.6 Conclusions
3.7 References
Chapter 4 Remittances and Economic Growth in Latin America and the Caribbean: The Impact of Human Capital Development
4.1 Introduction
4.2 Overview of Remittance Inflows to Latin America and the Caribbean
4.3 Review of Literature
4.4 Methodology and Data
- 4.4.1 The Model
4.4.2 The Data
4.5 Empirical Results
4.6 Conclusions
4.7 Acknowledgments
4.8 References
Chapter 5 Conclusions
5.1 References
Appendix 1 Variable Definitions and Data Sources
Appendix 2 Summary Statistics, Annual Values for the Period 1983-2003
Appendix 3 Variable Definitions and Data Sources
Appendix 4 Summary Statistics, Annual Values for the Period 1983-20033
Appendix 5 Perpetual Inventory Method
Appendix 6 Variable Definitions and Data Sources
Appendix 7 Summary Statistics, Five-year Averages for the Period 1975-2000
Vita
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