Latin American Countries

Decent Essays
Over the past decades Latin American countries have been in transition and relatively high growth rates were observed. Constant economic reforms led to a reduction in poverty in some regions with some exceptions. Latin American countries face many challenges but also they are niches of opportunity. Across regions a high sense of inequality and low penetration of technology are among the most recognizable challenges. In this regard, FDI works as the main engine for Latin American countries and has been increasing steadily over the recent years. Latin America may therefore include FDI as a key component of their modernization strategy, because of the potential benefits FDI is likely to generate to their economies. In particular, Latin American…show more content…
(Williams, 55-77, 2015) Governments in the region, for example, have integrated their economies with the global economy by reducing trade barriers, privatizing state-owned enterprises, and removing controls on prices and capital accounts (Hernández and Parro, 2008). Previous investigation regarding the potential differential effect of the determinants of FDI in Latin America and the Caribbean countries relative to a globe sample was made, and was able to conclude that in comparison with other developing countries, L.A provides some evidence, that better governance in L.A provides greater incentives for foreign investors, given that there is some type protection of intellectual property rights in these countries. (Williams 73, 2015). Pertinent…show more content…
Much research on FDI and IPR has been done during recent years and although many economists have recognized the role of IPR in acknowledging the issues of technology diffusion and the generation of new technology, studies have also criticized the role of the owners of IPRs over the market. On the other hand, the main focus on FDI is directly linked to technology transfer, from L.A countries’ perspective FDI has been seen as the main provider of technologies and skills, that are crucial and necessary for L.A countries to attain sustainable economic development. Several economists have investigated ways of transferring technology, however, all of them agree that the most significant and efficient way to transfer technology is through FDI. Ideas and knowledge are public goods, non- rival and non- excludable. In this sense everyone has the right to imitate it or acquire it. Because the generation of technology is involved with costs, not protecting the interests of innovators can result in a lack of investment in such areas and can result in a market failure. A well-structured IPR regime generates a temporary monopoly to innovators and enables them to achieve rents in order to have a return on their investments. ( Dhar and Joseph, 2012), Hence, countries that lack an IPR regime may suffer from low FDIs, due to the fact that foreign
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