Title

U.S. foreign direct investment in Latin America and the Caribbean: a case of remittances and market size

Document Type

Article

Publication Date

11-1-2016

Abstract

© 2016 Informa UK Limited, trading as Taylor & Francis Group. This article investigates the effect of remittances on U.S. foreign direct investment (FDI) flows to Latin America and the Caribbean (LAC). It covers 26 countries for the period 1983–2010. The results show a positive and significant impact of remittances on U.S. FDI flows. However, this effect depends upon the level of gross domestic product (GDP) per capita of the host country. On average, the results show that increasing remittances by one standard deviation increases U.S. FDI flows by 0.44 percent a year. Also, host country demand positively affects U.S. FDI flows, which supports the market size hypothesis.

Publication Source (Journal or Book title)

Applied Economics

First Page

5008

Last Page

5021

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