Foreign direct investment in Latin America: Exploring host-country determinants and multinationals' motives based on global and Canadian investors' activities.

摘要

The theoretical literature that explains the presence of multinational enterprises (MNEs) and foreign direct investments (FDI) has been developed in the second half of the 20th century. In the first half FDI was seen as part of the international capital flows, which were explained by the neoclassical theory as an arbitrage response to interest-rate differentials among countries. Only in the second half of the century did the theory of industrial organization identify FDI as a form of capital flows different from portfolio investment. To understand FDI, the analysis of the MNE was then proposed as a requisite. Industrial economists developed the theory of internalization as the main explanation for the use of FDI by MNEs, as opposed to licensing or other forms of having an international presence. Models for horizontal and vertical investments explain now in two different ways the presence of FDI. Several economic models have been proposed to explain them, but there is no single theory that explains the various kinds of FDI. In recent decades an analytical framework presented by John Dunning, with the purposive name of the eclectic paradigm, has been helpful in accommodating the economic theories under a broader umbrella.; MNEs have specific motives when they internationalize activities related to specific modules of their operations chain, and these motives should be closely related to some country characteristics. This research explores in more detail the main business objectives and activities of MNEs in order to infer their relation with the most relevant host-country determinants and multinational enterprises' motives for undertaking FDI actions in developing countries, and specifically in the Latin American region. The central argument of this thesis is that the motives and determinants of FDI are related to the type of activities and products (goods and services) internationalized by the MNE; therefore, in order to understand better the determinants of and the motives for FDI, it is necessary to identify first what activities are being conducted abroad, and their relation with the corporate objectives pursued by MNEs.; FDI has been studied so far as one block, using aggregate inflows by country. This study additionally analyzes inflows by sector and inflows by industry, as well as detailed data of sales and exports for a very large number of multinational enterprises with a presence in Latin America, in order to infer the main host-country determinants and the associated investors' motivation for their activities in the region. After looking at the general host-country determinants and the main motives of multinational enterprises from around the world, an assessment of the Canadian enterprises' motives for investing in the region is conducted, in order to contrast and validate possible determinants and motives when manufacturing activities are outclassed by primary-input-related activities and output-(market-) related activities in the services sector.; In general, this is a comprehensive research that combines econometrics, statistical analysis and field studies to gain a broad understanding of the subject.; Keywords: Foreign Direct Investment, FDI, Determinants, Host-Country Determinants, Latin America, Multinational Enterprises, MNE, Multinational Enterprises' Motives, Canadian Companies, Canadian Investors.