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Exploring the nexus between capital inflows and growth in Latin America and the Caribbean: a study of clusters led by Brazil and Mexico

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Abstract

In this paper, we used pooled regression within the ARDL approach and augmented Solow framework to explore the emerging uniformity and polarization in the two clusters led by Brazil and Mexico in Latin America and the Caribbean, adopted from Izquierdo and Talvi http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=35816781, 2011. The results show that effects of capital productivity and official development assistance are predominantly led by Brazil cluster while remittances, foreign direct investment and domestic credit are led Mexico cluster. While ODA is has a negative effect on the region’s growth, capital productivity, remittances, domestic credit and foreign direct investment are promising indicators for short-run and long-run growth in the region.

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Notes

  1. Note that cointegration relationship was examined for all variables by setting \(\Delta ly_{t}, \Delta lk_{t},\) \(\Delta lrem_{t}, \Delta loda_{t}, \Delta lfdi_{t},\) and \(\Delta lcred_{t}\) as dependent variable, respectively. However, only the key specification (4) is given where \(\Delta ly_{t}\) is set as dependent variable to conserve space.

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The author sincerely thanks the anonymous reviewers and the journal editor for their comments and the Springer Correction Team.

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  1. School of Economics, University of the South Pacific, Suva, Fiji

    Ronald Ravinesh Kumar

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Kumar, R.R. Exploring the nexus between capital inflows and growth in Latin America and the Caribbean: a study of clusters led by Brazil and Mexico. Qual Quant 48, 2537–2552 (2014). https://doi.org/10.1007/s11135-013-9906-5

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