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Regional Integration and the Location of FDI by

By Eduardo Levy Yeyati, Ernesto Stein and Christian Daude


respectively. The views expressed in this document are the authors ’ and do not necessarily reflect those of the Inter-American Development Bank. The authors would like to thank Josefina Posadas for her invaluable research assistance, and José Luis Machinea, Andrew Powell, Andrés Rodríguez Clare and conference participants at the 2001 LACEA Regional Integration Network meetings in Punta del Este for helpful comments and suggestions. 1 Regional Integration and the Location of FDI Over the last couple of decades, we have seen an increase in the number and depth of regional integration agreements (RIA) around the world. Indeed, the proliferation of trade agreements is quite widespread. The former European Economic Community has evolved into a single market (EU) and has recently adopted a common currency, while other non-EU European countries have formed free trade areas with the EU or are presently considering accession. Likewise, countries in Southeast Asia agreed to form the ASEAN Free Trade Area. The Americas have been no exception to this trend. A number of regional integration agreements have been either created (e.g., Mercosur, NAFTA) or strengthened (Comunidad Andina) in the 1990s. Some countries such as Mexico an

Year: 2002
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