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The determinants of foreign direct investment in Brazil: empirical analysis for 2001-2013

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Author: Correa da Silveira, Eduarda Martins - Dias Samsonescu, Jorge Augusto - Triches, Divanildo UN symbol.: LC/PUB.2017/8-P p. 171-184; grafs., tabls. April 2017

Description

This article aims to analyse the determinants of foreign direct investment (FDI) into Brazil between 2001 and 2013. It uses a vector error correction (VEC) model to analyse both the long-term function and the impulse-response function. The results show that levels of economic activity, wages and productivity are positively related to FDI inflows, which means that investors pursue market-seeking and efficiency-seeking strategies when targeting the Brazilian market. Although less important, the stability of the national economy and the exchange rate also proved statistically significant in explaining FDI inflows.