Abstract
Developing markets have recently gained importance not only in international trade, but also as an important host region for world foreign direct investment (FDI) inflows. With the aim to discuss the determinants factors of FDI in Latin America, we estimate a panel data model of economic and institutional determinants of FDI in eight Latin American countries, within the period 1996-2008. The empirical results support the hypothesis that FDI in Latin America is positively correlated to economic stability, growth and trade openness, and also to the improvement in the institutional and political environment. Furthermore, we found evidence that Multinational Companies are developing market and efficiency seeking strategies in the region.