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Remittances, Foreign Direct Investment and Economic Growth in Latin America and the Caribbean

by Garcia-Fuentes, Pablo Antonio

Abstract (Summary)
Some of the literature about foreign direct investment (FDI) analyzes the location of FDI. It tries to identify the factors that affect FDI flows. On the association between remittances and growth, this is still an open discussion. This journal style dissertation is an attempt to investigate about the associations between remittances and FDI and growth in Latin America and the Caribbean (LAC). The first paper investigates the effect of remittances on U.S. FDI outflows to LAC. It uses data on 14 LAC countries for the period 1983-2003. The results show that market size is one of the main determinants of FDI, which is in line with the market size hypothesis, and that remittances have a positive and significant effect on U.S. FDI, but only if the host country has a minimum threshold of per capita GDP. Thus, remittances reinforce the effect of the market size in these economies. The second paper analyzes the effect of remittances on FDI inflows to LAC. It uses data on 14 LAC countries during the period 1983-2003. The results show that market size is one of the main determinants of FDI; this is in line with the market size hypothesis. Remittances have a positive effect on FDI inflows but it depends upon the host country having a minimum threshold of per capita GDP. Hence, remittances strengthen the market size effect in these countries. The third paper evaluates the impact of remittances on growth through human capital in LAC. It uses panel data analysis for a sample of 14 LAC countries during the period 1975-2000. The results indicate that the level of human capital has a positive and significant effect on growth. Remittances have a positive impact on growth, but the realization of it holds only when the remittance receiving country has a minimum threshold of human capital stock.
Bibliographical Information:

Advisor:P. Lynn Kennedy; Michael E. Salassi; R. Wes Harrison; W. Douglas McMillin; Andrew Sluyter

School:Louisiana State University in Shreveport

School Location:USA - Louisiana

Source Type:Master's Thesis

Keywords:agricultural economics agribusiness

ISBN:

Date of Publication:07/08/2009

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