ABSTRACT
Introduction In Latin America and the Caribbean, the beginning of the 1990s showed a fairly small increase in foreign direct investment (FDI), yet by 1993 the annual growth rate of FDI was approximately 30% (see Baer and Miles, 2001 for details). There were several factors that account for this new trend. First, the economic policies of the host countries, as well as that of the home countries, impacted on both the size of the flows, and the targeted economic sectors. In particular, the decade of the 1990s ushered in the political and economic maturation of the region in terms of the policies adopted by Latin American countries. These included changes in macroeconomic policies, as well as structural and legal reforms emphasizing the benefits of the market (see Stein and Daude, 2001). Finally, the privatization of state-run enterprises provided a vehicle for the transfer of capital across the globe.
