Revista de Economía del Rosario

ISSN-e: 2145-454X

ISSN: 0123-5362 

An Empirical Examination of the Determinants of Foreign Direct Investment: A Firm-Level Analysis for the Colombian Economy

Aarón Garavito, Ana María Iregui, María Teresa Ramírez


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We use a large firm level data set to investigate the determinants of foreign direct investment
(FDI) in Colombia. We estimate econometric models for the determinants of the probability
that a firm receives FDI, as well as for the factors that help to explain the foreign share in a
firm’s capital. The results show that firms listed on the stock market, involved in foreign trade
activities, and operating in sectors with greater capital intensity are more likely to be recipients
of FDI. Also, the probability of a firm receiving FDI is directly related to its size.

Palabras clave

foreign direct investment (FDI), panel probit, database at firm level, Colombia


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