Since the North American Free Trade Agreement (NAFTA) was enacted in 1994, the amount of foreign direct investment (FDI) inflow in Mexico has increased significantly. After 20 years since NAFTA’s inception, this paper examines how FDI flows into Mexico compare to total factor productivity (TFP) for the 1960-2013 period. Results show there is a statistically significant unexplained portion of TFP positively affecting FDI. Factors used to determine TFP include total imports, total exports, and unemployment rate from 1980-2013. Results conclude that there are implications regarding international trade policy of the negative effects on FDI as they pertain to Mexico before and after the inauguration of NAFTA.
The main focus of this study is to examine factors that impact foreign direct invest based on differences in development of Latin American nations. Twenty-one countries are divided into low, middle, and high income groups based on wealth. All econometric tests are conducted for each individual economic subgroup. A random effects model is used to analyze the data. The study finds that there is a great deal of correlation between dependent and independent variables at the low level, less correlation at the middle level, and very little correlation at the high-income level. These results show that variables have different explanatory power based on how wealthy a nation is suggesting development effects a corporation’s decision to invest.
The main focus of this study is to test how certain geopolitical events affected the trend in foreign direct investment into Jordan from 1993-2011. This study uses prior research on foreign direct investment and economic growth in developing countries to create a theoretical framework for the determinants of FDI into Jordan. A robust ordinary least squares regression was used to best explain the model. The study finds that the 6 events chosen did not statistically impact FDI into Jordan, and only the economic wellbeing of Jordan significantly affected foreign direct investment. The implications of these results affect the Jordanian government and foreign investors to make more conscious decisions about the economic benefits of investing. Further research is necessary to expand this theoretical model in Jordan and throughout the world.