Dinámica de la inversión extranjera de cartera en México: recomendaciones de política

Abstract

This paper examines the factors, external and internal, determining the input and output flows of foreign portfolio investment in Mexico during the period 1995:01-2005:01. To do this, the dynamics of interest rates and the stock market returns in Mexico and the United States, as well as the country risk and the amount of foreign portfolio investment in Mexico are analyzed. Subsequently, we carry out a cointegration analysis to investigate possible functional short and long-term relationships between the above variables. Moreover, a Vector Autoregressive (VAR) with Error Correction (VEC) is specified and a Granger causality analysis is performed. Finally, we propose a number of measures and recommendations, modest but highly feasible in economic policy, that will allow, with a greater degree of certainty, financing with foreign investment the medium and long-term economic growth in an environment of macroeconomic stability