Hostname: page-component-848d4c4894-8kt4b Total loading time: 0 Render date: 2024-06-19T04:53:19.680Z Has data issue: false hasContentIssue false
  • English
  • Français

The Political and Economic Determinants of Foreign Direct Investment in Latin America: A Brief Comment on “Macroeconomic Deeds, Not Reform Words: The Determinants of Foreign Direct Investment in Latin America,” by Alfred P. Montero, LARR, Volume 43, Number 1

Published online by Cambridge University Press:  05 September 2022

John P. Tuman
John P. Tuman*
Affiliation:
University of Nevada, Las Vegas
Rights & Permissions [Opens in a new window]

Extract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

In a recent article, Montero (2008) sought to clarify the determinants of foreign direct investment (FDI) in Latin America. Testing a number of competing hypotheses, he found that macroeconomic stability, as measured by the current account, had the most consistent effect on FDI flows across countries in the region. Although Montero was interested in the role of macroeconomic stability, he also explored the impact of governance factors, including human rights and regime type. His results suggest that the effects of rights and regime type are inconsistent. Briefly, in his models that focused on governance and cost-related factors, the coefficient for the terror scale (rights abuse) had a positive and significant effect in two of three trials; in the same trials, the coefficient for Polity IV (regime) was negative and statistically significant, which suggests that politically competitive regimes received less FDI. Nevertheless, when Montero modeled the effects of economic reform, rights abuse and regime type were no longer statistically significant (Montero 2008, Table 1). Given the inconclusive nature of his findings with regard to rights and regime type, and the ongoing controversy in the literature, a brief comment on his article is potentially instructive.

Type
Research Reports and Notes
Information
Latin American Research Review , Volume 44 , Issue 1 , 2009 , pp. 191 - 194
Copyright
Copyright © 2009 by the Latin American Studies Association

References

Beck, Nathaniel, and Katz, Jonathan N. 2004 “Time-Series Cross-Section Issues: Dynamics, 2004.” Working Paper, Department of Political Science, New York University.Google Scholar
Beck, Nathaniel, and Katz, Jonathan N. 2007 “Random Coefficient Models for Time-Series Cross-Section Data: Monte Carlo Experiments.” Political Analysis 15 (1): 182–195.Google Scholar
House, Freedom 2004 Freedom in the World, Country Ratings, 1972–2004 (accessed February 28, 2008, at http://www.freedomhouse.org/ratings/index.htm).Google Scholar
Gibney, Mark 2006 Political Terror Scale: 1980–2005 (accessed February 26, 2008, at www.unca.edu/politicalscience/DOCS/Gibney/Political%20Terror%20Scale%201980-2005.pdf).Google Scholar
Marshall, Monty G., and Jaggers, Keith 2008 Polity IV Annual Time-Series, 1800–2006 (accessed February 26, 2008, at http://www.systemicpeace.org/inscr/inscr.htm).Google Scholar
Montero, Alfred P. 2008 “Macroeconomic Deeds, Not Words: The Determinants of Foreign Direct Investment in Latin America.” Latin American Research Review 43 (1): 55–83.CrossRefGoogle Scholar
Turnan, John P. 2006 “Regime Type, Rights and Foreign Direct Investment in Latin America: A Brief Comment.” Latin American Research Review 41 (2): 183–186.Google Scholar
Turnan, John P., and Ayoub, S. 2004 “The Determinants of Japanese Official Development Assistance in Africa: A Pooled Time-Series Analysis.” International Interactions 30 (1): 43–57.Google Scholar
Turnan, John P., and Emmert, Craig F. 1999 “Explaining Japanese Foreign Direct Investment in Latin America, 1979–1992.” Social Science Quarterly 80 (3): 539–555.Google Scholar
Turnan, John P., and Emmert, Craig F. 2004 “The Political Economy of U.S. Foreign Direct Investment in Latin America: A Reappraisal.” Latin American Research Review 39 (3): 9–28.Google Scholar
World Bank n.d. World Development Indicators. World Bank Group (accessed February 26, 2008, at http://ddp-ext.worldbank.org/ext/DDPQQ/showReport.do?method=showReport).Google Scholar