Abstract

ROMERO, José. Foreign Direct Investment and Economic Growth in Mexico: 1940-2011. Inv. Econ [online]. 2012, vol.71, n.282, pp.109-147. ISSN 0185-1667.

This paper studies the impact of direct foreign investment (FDI) on productivity for the 1940-2011 period. We use an aggregate production function that relates aggregate production with labor, and capital of three types: private domestic, foreign and government. We test our model for structural change, and the test indicates running two separate models, one for the 1940-1979 years and other for the 1984-2011 period. In both estimations we found a positive effect of foreign, private domestic and government capital on productivity. In the first period we find that the impact of foreign capital on productivity is important and greater than the effect of private domestic capital. In the second period growth is led by private domestic capital and foreign capital has a positive but minor effect on growth.

Keywords : Mexican economy; economic growth; foreign direct Investment.

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