Abstract
This study investigated if there were evidences that foreign direct investment (FDI) growth improved the Brazilian trade balance through an expansion in exports and import and if there was a predictable relationship between FDI strategies and trade balances. Results show that FDI promotes an increase in exports and also show an increase in the level of imports, especially for those companies engaged in market-seeking strategy. It also shows that FDI cause exports in the short and long-run and would cause imports in the short-run, but not in the long-run. The Granger causality test for the exports equation showed that FDI inflows in Brazil, lagged of three years, stimulated the export activity indicating that FDI strategies do not automatically lead to positive externalities on trade balance.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: Journal of Globalization, Competitiveness, and Governability
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.