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Ensayos. Revista de economía

On-line version ISSN 2448-8402

Abstract

SAAVEDRA LEYVA, Rafael Eduardo  and  FLORES ORONA, Carlos H.. The Governance as a Determinant of Foreign Direct Investment in Latin America. Ens. Rev. econ. [online]. 2017, vol.36, n.2, pp.123-145. ISSN 2448-8402.

This paper shows the relationship between foreign direct investment and governance of Latin American countries. In order to avoid multicollinearity problems with the "worldwide governance indicators", we build up a government efficiency index. Overall, the results show that the government efficiency index has a direct and significant relationship to foreign direct investment. Therefore, this paper highlights the role of governance to attract foreign investors.

Keywords : Foreign Direct Investment; Governance; Government Efficiency Index; Panel Data; Instrumental Variables.

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