| People and capital movements between Japan and Latin America have been noticeable over the years. Nonetheless, little attention has been paid to their relationship. A considerable number of studies have found that immigration is positively related to foreign investments, for example Britain in the US, yet none of them have analyzed the role of immigrants in Latin America. Most of the studies have shown economic and political variables as the determinants of foreign investments in the region. The present paper fills this gap and examines specifically whether immigration, as a social variable, is conducive to the contemporary Japanese direct investment in Latin America and the Caribbean. Based on the empirical analysis using cross-sectional regression model in 39 countries, this study finds that Japanese immigration is positively correlated with Japanese direct investments. The results continue to hold even for investments adjusted for inflation and for the immigration waves normalized by host country population. It adds to the recent findings that ethnic migrant networks may have a role in attracting foreign direct investments in Latin American and Caribbean countries. |
