Explaining Japanese Foreign Direct Investment in Latin America, 1979-1992
Author(s)
Tuman, John Peter; Emmert, Craig F.
Abstract
Discusses the variation in Japanese foreign direct investment (FDI) in Latin America between 1979 and 1992. The analysis focuses on 12 countries: Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Honduras, Mexico, Paraguay, Peru, Uruguay, and Venezuela. The findings suggest that market size, economic adjustment policies, and certain types of political instability have influenced Japanese FDI in the region. Official development assistance and a number of macroeconomic variables (e.g., real gross domestic product, yen appreciation, size of the skilled work force, inflation, and imports and exports) were found to have little explanatory power. While previous studies have emphasized economic determinants, the authors suggest that both political and economic variables are important in understanding Japanese investment behavior in Latin America.
