In relation to the economiccrisis that has begun in 2008, what can be observed is that Brazil was moreresistant than Mexico, concerning the effects of the crisis and FDI flows. In Brazil, the reduction of this investment only occurred in 2009, but then in 2010 the levels of foreign investment have already exceeded the amounts beforethe crisis, as can be seen in Figure 1.
In Mexico, the decline ofFDI flows began in 2008, intensified in 2009, and even growth resuming in 2010,flows haven’t reached pre-crisis levels (Figure 1). In Mexican economy, this fact could be explained by the high relationship with U.S. economy, which in crisishas slowed down the Mexican activities of export platforms, major receivers ofU.S. FDI, by ECLAC.
To build an analytical model that would enable the achievement of the overall goalof this work, it was necessary to identify the relevance of variables that determined FDI entrance in Brazil and in Mexico.Although there are many factors that affect the direction of FDI, four variables were selected as possible determinants of entry of this type of investment in both countries.The expression (1) shows the economic relations of interest in the determinants of FDI, as well as theexpected signs of this relationship.
FDI = f (+GDP, +OPEN,+EXCHANGE, +COMMOD) (1)