Cuevas, AlfredoMessmacher, MiguelWerner, Alejandro2014-01-032014-01-032005-12-06World Bank Economic Reviewdoi:10.1093/wber/lhi015https://hdl.handle.net/10986/16471Cross-country panel data are used to assess the effect of free-trade agreements on flows of Foreign Direct Investment (FDI). Free-trade agreements are found to have a significant positive effect on FDI flows, and free-trade agreements are found to matter more for the smaller members of the agreement. For example, the North American Free-Trade Agreement's (NAFTA) effect on FDI flows into Mexico is much larger than its effect on flows into the United States. These cross country results are used to assess NAFTA's effect on FDI flows into Mexico. After controlling for a set of other factors such as an increase in worldwide FDI flows the trade agreement is found to generate FDI flows nearly 60 percent higher than they would have been without the agreement.en-USCC BY-NC-ND 3.0 IGOACCORDBALANCE OF PAYMENTSBONDSBORROWERBUDGET SURPLUSCAPITAL ACCOUNTCAPITAL INFLOWCOMMERCIAL BANKSCOMPETITION LAWSCOMPETITIVE ENVIRONMENTCONSUMER PRICE INFLATIONCURRENCYCURRENT ACCOUNTCURRENT ACCOUNT BALANCEDEVELOPED COUNTRIESDEVELOPING COUNTRIESDOMESTIC INVESTORSDOMESTIC MARKETECONOMETRIC ANALYSISECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC MODELSECONOMIC POLICYECONOMIC REFORMSECONOMIC SECTORSECONOMIC SIZEECONOMIES OF SCALEELASTICITYEMERGING MARKETEMERGING MARKET COUNTRIESEMPIRICAL ANALYSISEMPIRICAL RESEARCHEMPIRICAL STUDIESEUROPEAN UNIONEXCHANGE RATEEXCHANGE RATE FLUCTUATIONSEXPORT GROWTHEXPORT PERFORMANCEEXPORTSEXTENDED MARKETEXTERNAL TRADEFACTOR ENDOWMENTSFACTOR MARKETSFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL DEVELOPMENTFINANCIAL INTEGRATIONFOREIGN CAPITALFOREIGN COMPANIESFOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTORSFOREIGN EXCHANGEFOREIGN FINANCINGFOREIGN FIRMSFOREIGN INVESTMENTFOREIGN INVESTMENT LAWFOREIGN INVESTORSFREE TRADEFREE TRADE AGREEMENTFREE TRADE AGREEMENTSFREE TRADE ASSOCIATIONFUTURE RESEARCHGDPGLOBAL COMPETITIVENESSGLOBAL FACTORSGLOBAL INVESTORSGLOBAL OUTPUTGLOBALIZATIONGRAVITY MODELGRAVITY MODELSGROWTH RATEHOME MARKETINSTITUTIONAL ENVIRONMENTINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL FLOWSINTERNATIONAL INVESTMENTINTERNATIONAL TRADEINVESTMENT FLOWSLABOR COSTSLABOR FORCELIBERALIZATIONMACROECONOMIC POLICIESMACROECONOMIC STABILITYMARKET ECONOMYMERGERSMULTINATIONAL CORPORATIONSMULTINATIONAL FIRMNATIONAL TREATMENTNET INFLOWSOPEN ECONOMYOPEN MARKETSOUTPUTOUTSOURCINGPARTICULAR COUNTRYPOLICY ENVIRONMENTPOLICY RESEARCHPORTFOLIOPORTFOLIO FLOWSPRIVATE CAPITALPRIVATE CAPITAL FLOWSPRIVATIZATIONPRODUCERSQUOTASRATE OF GROWTHREAL EXCHANGE RATEREGIONAL INTEGRATIONREGIONAL TRADEREGIONALISMREGIONALIZATIONSCALE EFFECTSOVEREIGN DEBTSTATISTICAL ANALYSISSTOCK EXCHANGETRADE AREATRADE ASSOCIATIONTRADE BARRIERSTRADE BLOCKTRADE LIBERALIZATIONTRADE RESTRICTIONSTRANSPORT COSTSTREASURYTREASURY BILLVOLATILITYWAGESWORLD ECONOMYWORLD INVESTMENT REPORTWORLD MARKETWORLD MARKET INTEGRATIONWORLD TRADEJournal ArticleWorld Bank10.1596/16471