Publicación: Do trade and investment agreements promote foreign direct investment within Latin America? Evidence from a Structural Gravity Model
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2020-10-30
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info:eu-repo/semantics/openAccess
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MDPI
Resumen
Latin America has experienced a surge in foreign direct investment (FDI) in the last two decades, in parallel with the ratification of major regional trade agreements (RTAs) and bilateral investment treaties (BITs). This paper uses the latest developments in the structural gravity model theory to study if the co-existence of BITs and two major regional agreements, Mercosur and the Latin American Integration Association (ALADI), exerts enhancing or overlapping effects on FDI for eleven countries in Latin America over the period 1995–2018. The study is novel as it accounts for variations in the degree of investment protection across BITs within Latin America by computing a quality index of BITs. It also explores the nature of interactions (enhancing/overlapping effects) between RTAs and BITs. The findings reveal that belonging to a well-established regional trade agreement, such as Mercosur, is significantly more effective than BITs in fostering intra-regional FDI. Phasing-in effects are large and significant and there is evidence of enhancing effects. Results within the bloc are heterogeneous: BITs exert a positive, but small effect, for middle income countries. However, BITs are not effective in attracting FDI in the case of middle to low income countries, unless these countries ratify BITs with a high degree of investment protection.
Descripción
La versión registrada de este artículo, publicado por primera vez en Mathematics 2020, 8, 1882, está disponible en línea en el sitio web del editor: https://doi.org/10.3390/math8111882
The registered version of this article, first published in Mathematics 2020, 8, 1882, is available online at the publisher's website: https://doi.org/10.3390/math8111882
Categorías UNESCO
Palabras clave
foreign direct investment, bilateral investment treaties, regional trade agreements, structural gravity model
Citación
Bengoa, M.; Sanchez-Robles, B.; Shachmurove, Y. Do Trade and Investment Agreements Promote Foreign Direct Investment within Latin America? Evidence from a Structural Gravity Model. Mathematics 2020, 8, 1882. https://doi.org/10.3390/math8111882
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Facultades y escuelas::Facultad de Derecho
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Análisis Económico