Keyword

Foreign direct investment, determinants, public policy, Mexico, Chile.

Abstract

In today’s world, Mexico and Chile are nations with growing economic development. Both have different and interesting histories leading to that growth and have had to design in recent years, public policies which contribute to the accumulation of capital. One of the principal sources of capital is the attraction of foreign direct investment – which, starting with its normative aspect – and proceeding to the attraction of investment flows, have had to be modified lately. According to the theory of the creation of new determinants, the probability of improving some determinants will contribute to an increase in attracting foreign direct investment flows to the receiving state. This research demonstrates that once the theory mentioned above has been applied to Mexico and Chile, the results shows that both nations attracted more FDI flows. For the case of Mexico, the skilled labor as well as low cost labor, tax incentives and natural resources contributed to get more inflows and for the case of Chile, inflows increased because it offers tax incentives, a better legal framework and an industrial policy focus on FDI to international investors. It is also remarkable that in both cases, they use regularly other determinants to attract FDI such as infrastructure, gross domestic product, geographical location, and the like.


Full Text : PDF
References
  1. Bellak, C., Leibrecht, M. y Liebensteiner, M. (2010). Attracting Foreign Direct Investment: the public policy scope for south east European countries.Eastern Journal of European Studies, 1(2), pp. 37-53
  2. Berkoz, L. &Sence, S. (2009). Locational Preferences of FDI Firms in Turkey: A Detailed Examination of Regional Determinants. European Planning Studies, 17(8), pp. 1243-1256
  3. Bliss, Ch. I. (1934). The method of probits. Science, 79 (2037),  pp. 38–39.
  4. Botello, Juan C. and Davila, M. (2013). Public Policy as a Determinant for Attracting Foreign Direct Investment in Mexico since 2000-2013. International Journal of Business and Economic Development, 2(1), pp. 78-89
  5. Botello, Juan C. and Davila, M. (2015). The new determinant creation theory:  a way to attract new foreign direct investment flows. International Journal of Business and Economic Development, 3(1), pp. 96-109
  6. Botric, V., Skuflic, L. (2006). Main determinants of foreign direct investment in the southeast European countries.Transition Studies Review, 13(2), pp. 357-377
  7. Broadman, H.G. & Sun, X. (1997). The Distribution of Foreign Direct Investment in China, The World Economy, 20(3), pp. 339-362
  8. Comisión Económica para América Latina y el Caribe. (2013). La Inversión Extranjera Directa en América Latina y el Caribe. Organización de las Naciones Unidas, Chile.
  9. Deichmann, J., Karidis, S. &Sayek, S. (2003). Foreign Direct Investment in Turkey: Regional Determinants, Applied Economics, 35(16), pp. 1767-1778.
  10. De los Santos,  T. (2014). The Determinants of Foreign Direct Investment Flows: The Chilean Case, Insights to a Changing World, 2014(3), pp. 52-68
  11. Dunning, J. (1988). Explaining international production. London: Unwin Hyman
  12. Engle, Robert F. and Clive W. J. Granger (1987). Cointegration and Error Correction: Representation, Estimation, and Testing. Econometrica, 55(2), pp. 251-276
  13. Erdal, F. &Tatoglu, F. (2002). Locational Determinants of Foreign Direct Investments in an Emerging Market economy: The Turkish experience, Multinational Business Review, 10(1), pp. 21-27
  14. Figueroa, S. (2012). Emergent Vulnerability in Attracting Foreign Direct Investment in Latin America: The Case of Mexico. Perspectives on Global Development and Technology, 11, pp. 374-385
  15. Goodspeed, T., Martinez-Vazquez, J. y Zhang, L. (2009). Public Policies and FDI Location: Differences between developing and developed countries, International Studies Program Working Paper, GDU paper No 0910
  16. Granger, Clive W. J. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37(3), pp. 424-438
  17. Granger, Clive W. J. and Paul Newbold (1974). Spurious Regressions in Econometrics. Journal of Econometrics, 2, pp. 111-120
  18. Groh, A., Wich, M. (2009). A Composite Measure to Determine a Host Country´s Attractiveness for FDI. IESE Business School Working Paper Number 833
  19. He, C. (2002). Information costs, agglomeration economies and the location of foreign direct investment in China, Regional Studies, 36(9), pp. 1029-1036
  20. Hill, Charles. (2012). International Business.12 Ed. USA: McGraw Hill.
  21. Kinoshita, Y. (2003). Why does FDI go where it goes? New Evidence from the transition economies.William Davidson Institute Working Paper Number 573
  22. Lim, D. (1983). Fiscal incentives and direct foreing investment in less developed countries, Journal of Development Studies, 19(2), pp. 207-212
  23. Mariotti, S. &Piscitello, L. (1995) Information Cost and Location of FDI´s Within the Host Country: Empirical Evidence from Italy, Journal of International Business Studies, 26(4), pp. 815-840
  24. Mendoza, J. (2011). Impacto de la Inversión Extranjera Directa en el Crecimiento Manufacturero en México. Revista Problemas del Desarrollo, 167(42), pp. 45-69
  25. Mexico, Gobierno Del Estado De Aguascalientes (2000), Informes De Gobierno (2000-2013).
  26. Mexico, Gobierno Del Estado De Baja California (2000), Informes De Gobierno (2000-2013).
  27. Mexico, Gobierno Del Estado De Baja California Sur (2000), Informes De Gobierno(2000-2013).
  28. Mexico, Gobierno Del Estado De Campeche (2000), Informes De Gobierno(2000-2013).
  29. Mexico, Gobierno Del Estado De Chiapas (2000), Informes De Gobierno(2000-2013).
  30. Mexico, Gobierno Del Estado De Chihuahua (2000), Informes De Gobierno(2000-2013).
  31. Mexico, Gobierno Del Estado De Coahuila (2000), Informes De Gobierno(2000-2013).
  32. Mexico, Gobierno Del Estado De Colima (2000), Informes De Gobierno(2000-2013).
  33. Mexico, Gobierno Del Distrito Federal (2000), Informes De Gobierno(2000-2013).
  34. Mexico, Gobierno Del Estado De Durango (2000), Informes De Gobierno(2000-2013).
  35. Mexico, Gobierno Del Estado De Mexico (2000), Informes De Gobierno(2000-2013).
  36. Mexico, Gobierno Del Estado De Guanajuato (2000), Informes De Gobierno(2000-2013).
  37. Mexico, Gobierno Del Estado De Guerrero (2000), Informes De Gobierno(2000-2013).
  38. Mexico, Gobierno Del Estado De Hidalgo (2000), Informes De Gobierno(2000-2013).
  39. Mexico, Gobierno Del Estado De Jalisco (2000), Informes De Gobierno(2000-2013).
  40. Mexico, Gobierno Del Estado De Michoacan (2000), Informes De Gobierno(2000-2013).
  41. Mexico, Gobierno Del Estado De Morelos (2000), Informes De Gobierno(2000-2013).
  42. Mexico, Gobierno Del Estado De Nayarit (2000), Informes De Gobierno (2000-2013).
  43. Mexico, Gobierno Del Estado De Nuevo Leon (2000), Informes De Gobierno(2000-2013).
  44. MEXICO, GOBIERNO DEL ESTADO DE OAXACA (2000), Informes De Gobierno(2000-2013).
  45. Mexico, Gobierno Del Estado De Puebla (2000), Informes De Gobierno(2000-2013).
  46. Mexico, Gobierno Del Estado De Quintana Roo (2000), Informes De Gobierno(2000-2013).
  47. Mexico, Gobierno Del Estado De Queretaro (2000), Informes De Gobierno(2000-2013).
  48. Mexico, Gobierno Del Estado De San Luis Potosí (2000), Informes De Gobierno(2000-2013).
  49. Mexico, Gobierno Del Estado De Sinaloa (2000), Informes De Gobierno(2000-2013).
  50. Mexico, Gobierno Del Estado De Sonora (2000), Informes De Gobierno(2000-2013).
  51. Mexico, Gobierno Del Estado De Tabasco (2000), Informes De Gobierno(2000-2013).
  52. Mexico, Gobierno Del Estado De Tlaxcala (2000), Informes De Gobierno(2000-2013).
  53. Mexico, Gobierno Del Estado De Veracruz (2000), Informes De Gobierno(2000-2013).
  54. Mexico, Gobierno Del Estado De Yucatán (2000), Informes De Gobierno(2000-2013).
  55. Mexico, Gobierno Del Estado De Zacatecas (2000), Informes de gobierno(2000-2013).
  56. Morgan, R., Katsikeas, A. (1997). Theories of international trade, foreign direct investment and firm internationalization: a critique, Management Decision, 35(1), pp.68-78
  57. Ondrich, J. &Wasylenko, M. (1993). Foreign Direct Investment in the United States(Kalamazoo, MI: W.E. Upjohn Institute for Employment Research)
  58. Popovici, C., Calin, A. (2012). Attractiveness Of Public Policies For Fdi In Central And Eastern European Countries. Annals of Faculty of Economics, 1(1), 61-67.
  59. Ramírez, M. (2001). Foreign Direct Investment in Mexico and Chile: A Critical Appraisal. LATIN America Business Review, 2(12), pp. 55-82
  60. Rasiah, R. (2000). Globalization and Private Capital Movements. Third World Quarterly, 21(6), pp. 943-961.
  61. Steinbrecher,G. &Shaw, T. (2008). Quantile mechanics. European Journal of Applied Mathematics 19(2), pp. 87–112.
  62. Wald, Abraham (1940). The Fitting of Straight Lines if Both Variables are Subject to Error. Annals of Mathematical Statistics, 11, pp. 284-300.
  63. Wei, Y., Liu, X. Parker, D. & Vaidya, K. (1999). The Regional Distribution of Foreign Direct Investment in China. Regional Studies, 33(9), pp. 857-867.