Foreign Direct Investment in Mexico since the Approval of NAFTA

Cross-country panel data are used to assess the effect of free-trade agreements on flows of Foreign Direct Investment (FDI). Free-trade agreements are found to have a significant positive effect on FDI flows, and free-trade agreements are found to...

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Bibliographic Details
Main Authors:	Cuevas, Alfredo, Messmacher, Miguel, Werner, Alejandro
Format:	Journal Article
Language:	English en_US
Published:	Published by Oxford University Press on behalf of the World Bank 2014
Subjects:	ACCORD BALANCE OF PAYMENTS BONDS BORROWER BUDGET SURPLUS CAPITAL ACCOUNT CAPITAL INFLOW COMMERCIAL BANKS COMPETITION LAWS COMPETITIVE ENVIRONMENT CONSUMER PRICE INFLATION CURRENCY CURRENT ACCOUNT CURRENT ACCOUNT BALANCE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DOMESTIC INVESTORS DOMESTIC MARKET ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC POLICY ECONOMIC REFORMS ECONOMIC SECTORS ECONOMIC SIZE ECONOMIES OF SCALE ELASTICITY EMERGING MARKET EMERGING MARKET COUNTRIES EMPIRICAL ANALYSIS EMPIRICAL RESEARCH EMPIRICAL STUDIES EUROPEAN UNION EXCHANGE RATE EXCHANGE RATE FLUCTUATIONS EXPORT GROWTH EXPORT PERFORMANCE EXPORTS EXTENDED MARKET EXTERNAL TRADE FACTOR ENDOWMENTS FACTOR MARKETS FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL DEVELOPMENT FINANCIAL INTEGRATION FOREIGN CAPITAL FOREIGN COMPANIES FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTORS FOREIGN EXCHANGE FOREIGN FINANCING FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTMENT LAW FOREIGN INVESTORS FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FREE TRADE ASSOCIATION FUTURE RESEARCH GDP GLOBAL COMPETITIVENESS GLOBAL FACTORS GLOBAL INVESTORS GLOBAL OUTPUT GLOBALIZATION GRAVITY MODEL GRAVITY MODELS GROWTH RATE HOME MARKET INSTITUTIONAL ENVIRONMENT INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL INVESTMENT INTERNATIONAL TRADE INVESTMENT FLOWS LABOR COSTS LABOR FORCE LIBERALIZATION MACROECONOMIC POLICIES MACROECONOMIC STABILITY MARKET ECONOMY MERGERS MULTINATIONAL CORPORATIONS MULTINATIONAL FIRM NATIONAL TREATMENT NET INFLOWS OPEN ECONOMY OPEN MARKETS OUTPUT OUTSOURCING PARTICULAR COUNTRY POLICY ENVIRONMENT POLICY RESEARCH PORTFOLIO PORTFOLIO FLOWS PRIVATE CAPITAL PRIVATE CAPITAL FLOWS PRIVATIZATION PRODUCERS QUOTAS RATE OF GROWTH REAL EXCHANGE RATE REGIONAL INTEGRATION REGIONAL TRADE REGIONALISM REGIONALIZATION SCALE EFFECT SOVEREIGN DEBT STATISTICAL ANALYSIS STOCK EXCHANGE TRADE AREA TRADE ASSOCIATION TRADE BARRIERS TRADE BLOCK TRADE LIBERALIZATION TRADE RESTRICTIONS TRANSPORT COSTS TREASURY TREASURY BILL VOLATILITY WAGES WORLD ECONOMY WORLD INVESTMENT REPORT WORLD MARKET WORLD MARKET INTEGRATION WORLD TRADE
Online Access:	http://documents.worldbank.org/curated/en/2005/09/17748206/foreign-direct-investment-mexico-approval-nafta http://hdl.handle.net/10986/16471

Description
Summary:	Cross-country panel data are used to assess the effect of free-trade agreements on flows of Foreign Direct Investment (FDI). Free-trade agreements are found to have a significant positive effect on FDI flows, and free-trade agreements are found to matter more for the smaller members of the agreement. For example, the North American Free-Trade Agreement's (NAFTA) effect on FDI flows into Mexico is much larger than its effect on flows into the United States. These cross country results are used to assess NAFTA's effect on FDI flows into Mexico. After controlling for a set of other factors such as an increase in worldwide FDI flows the trade agreement is found to generate FDI flows nearly 60 percent higher than they would have been without the agreement.

Foreign Direct Investment in Mexico since the Approval of NAFTA

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