Political Risk and the Institutional Environment for Foreign Direct Investment in Latin America : : An Empirical Analysis with a Case Study on Mexico.

• Superior document: Goettinger Studien Zur Entwicklungsoekonomik / Goettingen Studies in Development Economics Series ; v.15
• Author: Stosberg, Jörg.
• Place / Publishing House: Frankfurt a.M. : : Peter Lang GmbH, Internationaler Verlag der Wissenschaften,, 2004.; {copy}2005.
• Year of Publication: 2004
• Edition: 1st ed.
• Language: English
• Series: Goettinger Studien Zur Entwicklungsoekonomik / Goettingen Studies in Development Economics Series
• Physical Description: 1 online resource (350 pages)

Table of Contents

• Cover
• List of Figures
• List of Tables
• List of Abbreviations
• List of Variables
• 1 Introduction
• 1.1 The Problem
• 1.2 Concept and Methodology
• 2. Risk in the Theory of Investment
• 2.1 General Theory of Investment
• 2.1.1 Basic Theory of Investment
• 2.1.1.1 Definition and Categories of Investment
• 2.1.1.2 Opportunity Costs, Time Preference and Net Present Value Approach
• 2.1.2 Models of Investment under Certainty
• 2.1.2.1 Overview
• 2.1.2.2 The q-theory of Tobin
• 2.1.2.2.1 The Basic Model
• 2.1.2.2.2 The Romer Model
• 2.1.2.2.2.1 The Model
• 2.1.2.2.2.2 Analyzing the Model
• 2.1.2.3 Critical Evaluation of the Models
• 2.1.3 Investment under Uncertainty
• 2.1.3.1 Overview
• 2.1.3.2 Characteristics of Uncertainty and Risk
• 2.1.3.3 Uncertainty in the Romer Model
• 2.1.3.3.1 Modification of the Model
• 2.1.3.3.2 Effects of Uncertainty on Reversible Investments
• 2.1.3.3.3 Effects of Uncertainty on Irreversible Investment
• 2.1.3.4 The Dixit/Pindyck Model
• 2.1.3.4.1 Overview
• 2.1.3.4.2 The Model
• 2.1.3.4.3 Analyzing the Model
• 2.1.3.5 Critical Evaluation of the Models
• 2.1.4 Summary of Propositions
• 2.2 Theory of International Investment
• 2.2.1 Overview
• 2.2.2 Definition and Characteristics of FDI
• 2.2.3 Theoretical Determinants of FDI
• 2.2.3.1 Overview
• 2.2.3.2 The Eclectic Paradigm as Analytical Framework
• 2.2.4 Empirical Studies of Aggregate FDI
• 2.2.4.1 Overview
• 2.2.4.2 Empirical Determinants of FDI
• 2.2.5 Political Risk and International Investment
• 2.2.5.1 Definition of Political Risk
• 2.2.5.2 Categories of Political Risk and Anecdotal Evidence
• 2.2.5.3 Modeling Political Risks for International investors
• 2.2.5.3.1 Existing Models of Political Risks
• 2.2.5.3.2 Implications of General Investment Models
• 2.2.5.4 Empirical Evidence
• 2.3 Concluding Remarks.
• 2.4 Chapter Summary
• 3. Political Risk and National Institutions
• 3.1 Political Institutions and Economic Performance
• 3.1.1 Overview
• 3.1.2 The Analytical Framework
• 3.1.2.1 Theoretical Foundations
• 3.1.2.2 Property Rights
• 3.1.2.3 The Concept of Credible Commitment
• 3.1.2.4 Rule of Law
• 3.1.2.5 Discretionary Freedom of the Government
• 3.1.2.6 The Concept of Social Capital
• 3.1.3 Political Regime Type and FDI
• 3.1.3.1 Systematic Order Of Political Regimes
• 3.1.3.2 Economic Analysis of Political Regimes
• 3.2. Modeling the Emergence of Political Risks
• 3.2.1 Classical Political Risk Models
• 3.2.2 The Political Constraints Model
• 3.2.3 The Effective Party Approach
• 3.2.4 Synthesis and Hypothesis
• 3.3 Empirical Measures of Political Risks
• 3.3.1 Overview
• 3.3.2 The International Country Risk Guide (ICRG)
• 3.3.3 The POLCON-Index
• 3.3.4 Critical Evaluations of the Indices
• 3.4 Mitigating Political Risk
• 3.4.1 Overview
• 3.4.2 National Mitigation Strategies
• 3.4.2.1 Investment Incentives, Social Standards and Environmental Legislation
• 3.4.2.2 Macroeconomic Stability
• 3.4.2.3 Accountability, Transparency and Rules-Based Governance
• 3.4.3 International Strategies
• 3.4.3.1 Multilateral Agreements
• 3.4.3.2 Bilateral Agreements and Regional Integration
• 3.5 Conclusion
• 3.6 Chapter Summary
• 4. Political Risk and FDI in Latin America
• 4.1 Stylized Facts on Foreign Investment in Latin America
• 4.2 Empirical Investigation of the Impact of Political Risk on FDI
• 4.2.1 Methodology
• 4.2.2 Model Specification
• 4.2.3 Data Issues
• 4.2.4 Results
• 4.3 Conclusions
• 4.4 Chapter Summary
• 5. Political Risk and FDI in Mexico
• 5.1 Politics in Mexico
• 5.1.1 Stylized Facts of Mexican Political History
• 5.1.2 The Current Political System in Mexico
• 5.1.2.1 Overview.
• 5.1.2.2 The Executive Branch of Government
• 5.1.2.3 The Legislative Branch of Government
• 5.1.2.4 The National Judiciary
• 5.1.2.5 The Political Parties
• 5.1.2.6 The Federalist System
• 5.1.2.7 Freedom of Speech, Press and Media
• 5.2 Foreign Capital Flows to Mexico
• 5.2.1 Brief Economic History
• 5.2.1.1 Overview
• 5.2.1.2 The Reform Period 1982-today
• 5.2.2 The Evolution of Foreign Investment to Mexico
• 5.2.2.1 The Mexican Foreign Investment Legislation
• 5.2.2.1.1 The Evolution of the National FDI Legislation
• 5.2.2.1.2 Investment Legislation of NAFTA and other Bilateral Agreements
• 5.2.2.2 Mexican Foreign Investment Policy and Inflows of FDI to Mexico
• 5.2.2.3 The Structure and Geographical Origins of FDI to Mexico
• 5.3 Political Risk in Mexico
• 5.3.1 Overview
• 5.3.2 The Macroeconomic Environment
• 5.3.3 Mexican Institutions and Risk
• 5.3.3.1 Government Stability, Political Constraints and Regime Type
• 5.3.3.2 Rule Of Law
• 5.3.3.3 Corruption
• 5.3.3.4 Protection of Property Rights
• 5.3.4 Societal Factors of Risk
• 5.3.4.1 Overview
• 5.3.4.2 Ethnic, Religious and other Internal Conflicts
• 5.3.4.3 Governmental Legitimacy in Mexico
• 5.3.5 Aggregate Political Risk in Mexico
• 5.4 Risk Mitigation Strategies in Mexico
• 5.4.1 National Risk Mitigation Strategies
• 5.4.1.1 Investment Enhancement by Incentives
• 5.4.1.2 The Beauty Contest
• 5.4.2 The International Risk Mitigation Strategy
• 5.5 Conclusion
• 5.6 Chapter Summary
• 6. Conclusion and Outlook
• Annex I
• Annex II
• References.