On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014

On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014

The aim of this work is to identify whether there was a relationship between foreign direct investment (FDI) and long-term growth in Latin America from 1990 to 2014. Some authors have questioned whether FDI and other capital flows, besides current account results, could constrain economic growth. If...

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Main Authors: Douglas Alencar, Eduardo Strachman, Lúcio Otávio Seixas Barbosa, Cláudio Alberto Castelo Branco Puty
Format: Article
Language:English
Published: Associazione Economia civile 2019-09-01
Series:PSL Quarterly Review
Subjects:
capital flows
economic growth
external constraint
Online Access:https://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/15694/15077
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spelling doaj-558877cc155b43cfafaa0b8f6f6f6b052020-11-25T03:45:20ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432019-09-0172290207221https://doi.org/10.13133/2037-3643_72.290_3 On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014Douglas AlencarEduardo StrachmanLúcio Otávio Seixas BarbosaCláudio Alberto Castelo Branco PutyThe aim of this work is to identify whether there was a relationship between foreign direct investment (FDI) and long-term growth in Latin America from 1990 to 2014. Some authors have questioned whether FDI and other capital flows, besides current account results, could constrain economic growth. If FDI and other capital flows are staunched and this is accompanied by capital outflows originated from FDI in previous periods, then it would be possible to experience a balance of payments constraint to economic growth. To test this hypothesis, we slightly amend the Thirlwall and Hussain model and employ the McCombie test for the cases of Brazil, Mexico, and Argentina. We find that the negative effect of primary income remittances on FDI, and even capital inflows through FDI, may curbs growth in the long run.https://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/15694/15077capital flowseconomic growthexternal constraint
collection DOAJ
language English
format Article
sources DOAJ
author Douglas Alencar
Eduardo Strachman
Lúcio Otávio Seixas Barbosa
Cláudio Alberto Castelo Branco Puty
spellingShingle Douglas Alencar
Eduardo Strachman
Lúcio Otávio Seixas Barbosa
Cláudio Alberto Castelo Branco Puty
On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014
PSL Quarterly Review
capital flows
economic growth
external constraint
author_facet Douglas Alencar
Eduardo Strachman
Lúcio Otávio Seixas Barbosa
Cláudio Alberto Castelo Branco Puty
author_sort Douglas Alencar
title On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014
title_short On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014
title_full On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014
title_fullStr On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014
title_full_unstemmed On foreign direct investments and the balance of payments constrained growth model in Latin America, 1990-2014
title_sort on foreign direct investments and the balance of payments constrained growth model in latin america, 1990-2014
publisher Associazione Economia civile
series PSL Quarterly Review
issn 2037-3635
2037-3643
publishDate 2019-09-01
description The aim of this work is to identify whether there was a relationship between foreign direct investment (FDI) and long-term growth in Latin America from 1990 to 2014. Some authors have questioned whether FDI and other capital flows, besides current account results, could constrain economic growth. If FDI and other capital flows are staunched and this is accompanied by capital outflows originated from FDI in previous periods, then it would be possible to experience a balance of payments constraint to economic growth. To test this hypothesis, we slightly amend the Thirlwall and Hussain model and employ the McCombie test for the cases of Brazil, Mexico, and Argentina. We find that the negative effect of primary income remittances on FDI, and even capital inflows through FDI, may curbs growth in the long run.
topic capital flows
economic growth
external constraint
url https://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/15694/15077
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