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Foreign Direct Investment in Latin America and the Caribbean 2012

image of Foreign Direct Investment in Latin America and the Caribbean 2012
As in previous years, this report provides a quantitative overview of foreign direct investment (FDI) inflows and examines these capital flows by destination economic sector and geographical area of origin. It describes the pattern of FDI originating in the countries of Latin America and the Caribbean, focusing on the international expansion under way at some of the region’s major companies, the so-called trans-Latins. The main theme of this report is the operations of European companies in Latin American and Caribbean. The report examines the behaviour and strategy of the major European transnationals and, in search of a more thorough understanding, takes a detailed look at two sectors where foreign capital, especially from Europe, plays a substantial role: commercial banking and power.

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Transnational company profits: Repatriation and reinvestment

Over the past decade the profits of transnational corporations operating in Latin America and the Caribbean have increased fivefold. Returns swelled from an average of US$ 20 billion (at current prices) between 1998 and 2002 to US$ 113.067 billion in 2011. This surge reflects both the growing importance of transnational corporations in the region’s economy and their higher average returns, on the back of robust domestic demand and high prices for export commodities. The magnitude of this change calls for an examination of the role of FDI as a source of capital for these economies and its contribution to growth and structural change in the region.

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