Foreign direct investment and the supply of credit in México

Abstract

THE DOCUMENT EVALUATES THE IMPORTANCE OF FOREIGN CAPITAL FLOWS ON THE SUPPLY OF CREDIT IN MEXICO. THE ANALYSIS SHOWS THAT, ALTHOUGH THE FLOWS OF FOREIGN DIRECT INVESTMENT AND THE SUPPLY OF CREDIT ARE POSITIVELY CORRELATED, THE SERIES DO NOT SHARE A COMMON CYCLE OR A COMMON TREND AND THERE IS NO CAUSAL RELATIONSHIP IN THE SENSE OF GRANGER AMONG THEM. THESE RESULTS INDICATE THAT THE ASSUMPTION THAT FLOWS OF FOREIGN DIRECT INVESTMENT AFFECT THE CONDITIONS OF THE CREDIT MARKET HOULD NOT BE MADE.