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Foreign Direct Investment, Exports and Imports in Mexico
Author(s) -
PachecoLópez Penélope
Publication year - 2005
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2005.00724.x
Subject(s) - foreign direct investment , balance of payments , economics , multinational corporation , international economics , international trade , liberalization , granger causality , constraint (computer aided design) , balance of trade , macroeconomics , market economy , mechanical engineering , finance , engineering , econometrics
This paper analyses the liberalisation of foreign direct investment (FDI) in Mexico since the late 1980s, and its relationships with exports and imports. Such a process has eased the access of multinational corporations (MNCs) to the country, which has promoted exports. However, it has also resulted in a higher import content and the displacement of local firms, which has limited Mexico's economic development through the balance of payments constraint. The analysis is supported by the existence of linkages – bidirectional Granger causality – between exports, imports and FDI.