The Co-Evolution of FDI and the Output and Export Structures of Brazil and Mexico, 2000–2015

Abstract

Abstract This chapter investigates the co-evolution between FDI, economic structure, and export structures in the two largest Latin American economies, Brazil and Mexico, over the period 2000–2015. Both initially followed quite similar development strategies during the import substitution era, but in the era of the Washington Consensus adjusted their strategies in differing ways. In addition to the analysis of key indicators, the chapter discusses the role played by industrial policies—or their absence—within Brazil’s and Mexico’s development strategies. Industrial policy instruments, such as infant industry protection, subsidies, tax and financial incentives, as well as performance requirements, may be crucial to shift the economic structure in the direction of the desired industries.