International trade, economic growth, and foreign direct investment: causality evidence in Mexico

This document investigates the existence of causality, in the Granger sense, and
its direction among real Gross Domestic Product, exports, imports and Foreign
Direct Investment of the Mexican case. The analysis applies the methodology
of cointegration developed by Liu, Burridge and Sinclair (2002) and the tests
of structural changes for the vector of cointegration developed by Quintos
(1993 with Phillips, 1997 and 1998). The statistical results show that there
is a stable and causal relationship of the FDI towards the rest of the variables;
however in this case it is unidirectional. In this sense, there are benefits of FDI
in Mexico, nevertheless this links can be triggered first by external factors,
before the evolution of the national economy.
José Luis de la Cruz
José Antonio Núñez Mora
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