Foreign Investment in Colombia's Financial Sector (original) (raw)
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Journal of Development Economics, 2000
This study analyzes foreign investment in Colombia's financial system, chronicling major changes in legislation, describing how investment flows evolved over time, and comparing performance of foreign-owned versus domestic banks. Panel data estimations reveal that financial liberalization in general had a beneficial impact on bank behavior in Colombia. Although the positive contribution of foreign entry may be overstated in recent studies by not controlling for other liberalization factors, foreign (and domestic) entry beginning in 1990 did improve bank behavior by enhancing operative efficiency and competition. However, this came at the expense of a deterioration in the loan quality of domestic banks. JEL Classification Numbers:F3, E4, G2
Foreign Investment in Latin America: Recent Trends and Prospects
Latin America in the International Economy, 1973
The author is indebted to the members of the CEPLAN seminar and to Mrs. Rosemary Thorp for their helpful comments. a This does not mean that we ignore important contributions published in the last decades. Several of the most recent publications are mentioned in the bibliography at the end of the text.
Finance, foreign (direct) investment, and the Dutch disease: the case of Colombia
Greenwich Papers in Political Economy, 2015
In recent years Colombia has grown relatively rapidly, but it has been a biased growth. The energy sector (the locomotora minero-energetica, to use the rhetorical expression of President Juan Manuel Santos) grew much faster than the rest of the economy, while the manufacturing sector registered a negative rate of growth. These are classic symptoms of the well-known 'Dutch disease', but our purpose here is not to establish whether the Dutch disease exists or not, but rather to shed some light on the financial viability of several, simultaneous dynamics: (i) the existence of a traditional Dutch Disease being due to a large increase in mining exports and a significant exchange rate appreciation, (ii) a massive increase in foreign direct investment (FDI), particularly in the mining sector, (iii) a rather passive monetary policy, aimed at increasing purchasing power via exchange rate appreciation, (iv) more recently, a large distribution of dividends from Colombia to the rest of the world and the accumulation of mounting financial liabilities. The paper will show that these dynamics constitute a potential danger for the stability of the Colombian economy. Some policy recommendations are also discussed.
Credit, Financial Liberalization and Manufacturing Investment in Colombia
SSRN Electronic Journal, 2002
The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. The Research Department (RES) produces the Latin American Economic Policies Newsletter, as well as working papers and books, on diverse economic issues.
2016
Notes and explanation of symbols The following symbols have been used in the tables in this study: Three dots (...) indicate that data are not available or are not separately reported. A minus sign (-) indicates a deficit or decrease, unless otherwise indicated. A full stop (.) is used to indicate decimals. Use of a hyphen (-) between years, e.g., 1960-1970, signifies an annual average for the calendar years involved, including the beginning and the end years. The word “dollars ” refers to United States dollars, unless otherwise specified. Figures and percentages in tables may not neccessarily add up to the corresponding totals, because of rounding. Foreign Investment in Latin America and the Caribbean, 2002 Report is the latest edition of a series published annually by the ECLAC Unit on Investment and Corporate Strategies. It was prepared by Alvaro Calderón, Graciela
International Trends in the Field of Foreign Investments*
Economica, 2020
Foreign investments represent placements in the territory of a country made by non-resident investors. Depending on the approach position, they are considered as forms of international investment and part of international investment market. The aim of research was to study global transformations in the field of foreign investments, which can influence the investment process in the Republic of Moldova. For this purpose, databases formed by international institutions, as well as experts' opinions in the approached field were studied. The global market for foreign investments can be divided in two main segments: foreign direct investments and foreign portfolio investments. The research' results are major importance both from the point of view of global financial processes, as well as for outlining benchmarks for perfecting întreand promoting the investment policy in the Republic of Moldova.
Finance, Foreign (Direct) Investment and Dutch Disease: The Case of Colombia
2014
In the recent years the Colombian economy grew relatively rapidly, but it was a biased growth. The energy sector (the locomotora minero-energetica, to use the rhetorical expression of President Juan Manuel Santos) grew much faster than the rest of the economy. The manufacturing sector registered a negative rate of growth. These are the symptoms of the wellk o Dut h disease a d the ase of Colo ia has ee al ead idel a al zed i the literature. In this paper, we investigate a different reason why an economy may suffer from an expansion of the mining sector. In particular, we want to shed some light on the financial side of the economy and its links with a resource-boom. We can observe several unsustainable dynamics: (i) a traditional Dutch Disease due to a large increase in mining exports and a significant exchange rate appreciation, (ii) a massive increase in foreign direct investment (FDI), particularly in the mining sector (iii) a rather passive monetary policy, aiming at increasing purchasing power via exchange rate appreciation, (iv) recently, a large dividends distribution from Colombia to the rest of the world and the accumulation of mounting financial liabilities. The paper shows why these dynamics may be interpreted as a case of financial Dutch disease and constitute a potential danger for the stability of the Colombian economy. Some policy recommendations are discussed.
How does Colombia attract foreign direct investment?
International Journal of Business and Economic Development, 2019
During the eighties, Latin America was surrounded by economic crises, increased external debt, and poor growth of the Gross Domestic Product as well as little attraction of foreign direct investment (FDI). Later in the nineties, some countries in the region inspired by the desire to eliminate the protectionist model had to undertake reforms that sought to achieve their commercial opening to start a new economic model and thereby show the world as an attractive area for attracting investment mainly from Europe and Asia. One of the countries that made institutional changes by creating good conditions in the nineties as well as in the next decade to attract FDI was Colombia. The purpose of this paper is to demonstrate how Colombia attracted foreign capitals during 2005-2012. A probit model was applied (Botello, J.&Davila, M.,2015) to determine if the probability of improving the number of determinants to attract FDI will result in more inflows. The results show that the design of an industrial policy focused on attracting FDI, as well as the increase of the Gross Domestic Product, the offer of natural resources to foreign investors, the skilled workforce and the improvements in infrastructure were the determinants that increased the attraction of capitals. The implications for policy makers are to improve the rest of the determinants studied in this original research to increase the FDI flows into Colombia.