Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/328595 
Year of Publication: 
2022
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 10 [Issue:] 12 [Article No.:] 295 [Year:] 2022 [Pages:] 1-21
Publisher: 
MDPI, Basel
Abstract: 
We estimate foreign direct investment elasticities of output, of unskilled and skilled labor, and of unskilled and skilled wages for Chile, both at an aggregate level and for eight economic sectors. We use regional data from official Chilean sources ranging from 2012 to 2019 and data from economic sectors in each region for the period 1996-2011. Estimates are based on a simultaneous equation approach, which considers the two-way relationships between FDI and output as well as the relationships between output, labor, and wages stressed by the duality theory of production in economics. The estimations confirm that FDI triggers growth and that FDI follows growth. Due to the positive effects on output, FDI boosts employment creation, particularly of skilled labor. The estimated effects on wages are not significant, either statistically or practically. The output and labor effects of FDI are positive and significant in all economic sectors, but point estimates suggest that they could be larger for the agriculture-forestry-fishing sector. The results indicate that realistic increases in FDI can have substantial output and employment effects in Chile.
Subjects: 
Chile
foreign direct investment
labor demand
output
wages
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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