Japanese Direct Investment in Latin America in the Nineties


This paper investigates the determinants of Japanese foreign direct investment (FDI) in Latin America. The analysis considers eleven countries (Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela) and covers the 1980-1997 period. Empirical findings indicate that market size, bilateral commercial ties, and relative labour costs are important economic factors explaining the Japanese FDI in the region. Additionally, the relevance of institutional factors on FDI decisions is corroborated by some results concerning the legal structure of the investment host countries.

Eduardo Kiyoshi TONOOKA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059