Investment Booms and Institutions: Evidence for the World and the Andean Region

This paper provides evidence of a positive effect of institutions and reforms in initiating investment booms. We constructed an unbalanced panel of 178 countries for the period 19502019 that considered institutions and reforms at different levels and dimensions. We analyzed the effects of these variables on 159 carefully estimated investment boom episodes, controlling for the standard determinants of investment and using a battery of estimation techniques and robustness checks. Overall, marketoriented and democratic institutions favor the advent of investment booms. Structural reforms present mixed effects and in some cases these are nonlinear. While trade and capital account reform have negative effects, domestic finance, product, and labor market reforms have the opposite. Beyond institutions and reforms, we find different effects regarding external, macro, and structural variables.

Bibliographic Details

Main Author:	Inter-American Development Bank
Other Authors:	Osmel Manzano
Language:	English
Published:	Inter-American Development Bank
Subjects:	Integration and Trade, Economy, Investment, Finance, Economic Development, Gross Domestic Product, Democracy, Exchange Rate, Productive Transformation, E02 - Institutions and the Macroeconomy, E22 - Investment • Capital • Intangible Capital • Capacity, F21 - International Investment • Long-Term Capital Movements, H54 - Infrastructures • Other Public Investment and Capital Stock, O16 - Financial Markets • Saving and Capital Investment • Corporate Finance and Governance, O43 - Institutions and Growth, O47 - Empirical Studies of Economic Growth • Aggregate Productivity • Cross-Country Output Convergence, O50 - Economywide Country Studies: General, P11 - Planning Coordination and Reform, institutions;investment;reforms;Latin America;Venezuela;Andean Region;región andina;transformación productiva,
Online Access:	http://dx.doi.org/10.18235/0004260 https://publications.iadb.org/en/investment-booms-and-institutions-implications-for-the-andean-region
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