**company YPF during the** first **half of** 1993. **For foreign** investors, this move **might have indicated a major change** in **attitude towards private sector involvement, thus attracting substantial amounts of** additional FDI.

Table 6 Sector-Specific Privatizations as FDI Determinants

|,<br>,<br>Vkdb<br>**___**|I|..<br>**FD**|**I**per**capit**|P<br>**a**||||FDIsham|_||
|---|---|---|---|---|---|---|---|---|---|---|
|Constant|.5.6<br>(**1.2)**|***6.161**<br>**(A.001)**|3.41<br>(-0.36351|**-0.096**<br>**(l 6021**|**.6.61**<br>**(1.014)**|**1,4113**<br>O**1106)**|**1.4643**<br>**(1.1060**|**2.390**<br>**(2,16711**|**o0.024**<br>**(0.904)**|**1.4876**<br>**(1.1091(**|
|GDP W**.8up**|**0.0014**<br>(0.4121)|**0.0061**<br>**(1.4441**|**0.0066-**<br>**(2,41 76)**|**0.0012**<br>(0.3034)|**0.0091**<br>**(2.2930)**|**.0.000**<br>**(i0.39**|**0e0002**<br>**to0.1616)**|**0.0002**<br>0.2703)|**0.002**<br>**((.464)**|**0.0002**<br>**1O01601)**|
|_T,od_|**00317**..<br>**6.80121**|0.028.6..<br>**(4.64191**|0.03472 .<br>**(4.6733)**|**0.0(62**<br>**(2.1601)**|0.0302<br>**(3.4226)**|***0.000a**<br>**(.4O1 1)**|**00008**<br>**(-054671**|0.0009<br>**(0.7111)**|**0.002**<br>**(.1.69)**|**.0.001**<br>**4F l))**|
|**lhvat**|0.0121<br>**t0.6114)**|0.0264<br>**00.00646**|**0.0027**<br>(0.0726)|0.0317<br>**11.1132)**|0.0236<br>**(0.6404)**|**0,0193-..**<br>(2.93)9)|**0.0o00-(**-<br>**(2.56123**|0,0123<br>**(1.9166)**|0.0207-..<br>**(3.6567)**|0.0201...<br>(2.77471|
|**Gowownwi**<br>C<br>**p**|**4.021**<br>(-1.0321|**4.062**<br>*<br>**(*2.036)**|***0.06-**<br>**(-2.4.7.)**|**o00t**<br>**10.4st4)**|**4.0903**<br>(-1.041)|**4.019**<br> <br>(-2.464)|-0 4,022..<br>(-3.4823|4.023-.<br>**(-4.647)**|**4.006**<br>(4.016J|**4.022.**<br>**(-3.386)**|
|Exchanse**Sin**|**0.0621**<br>**(1.0148)**|**0.0(5**<br>**(0.2744)**|**0.0(30**<br>**10.2046)**|0.1406<br>(2.1668)|**0.0206**<br>(0.294)|**40.06**<br>**(0.6264)**|**4.011**<br>**(0.773)**|4.002<br>**(-1.064**|0.0032<br>**M0.24M61)**|**4.012**<br>**(0.60)**|
|**d**<br>t|**_.I-_**|**_4-._**|**_._**|**_.4._**|**_.1._**|2.06646<br>**(2.4406)**|1.70046<br>*<br>(2.4737m|**1.64(4-06,**<br>**(2.6006)**|**2.216-06**<br>**..**<br>**(3.t641)**|**7.646**<br>(2.4636)|
|**F_Edp(Ex.tg**<br>**Rweo**|**0.378**<br>**(6.001)**|**0.372**<br>**(3.641)**|**0.364***.<br>**.8SS)**|**0.514**<br>**(5**<br>**6.80M)**|0.408<br>**(3.66**|0.027<br>**(117)**<br>**l1.466)**|0.034|0.031<br>**(1.64)**|0.031<br>**(1a6"**|0.032<br>**n1.209**|
|**Pbw**<br>Boom<br>**Pivdo*a)wt**|1.328<br>(2.7992)|-/-.|**_I._**|**_--_**||**0.0602**<br>o1-<br>(0.3743)|**_./._**|**_/-4_**||**_._**|
|**_S.ccndwy_**<br>**Set**<br>**Pdv^adzt)on**|4.|.3703<br>**0071**|**_._**|**_./._**|**_4-_**|**_-_**|**4.0026**<br>t<br>(0.094)|**_41._**|/b|**_4._**|
|**(NW41 Seamor**<br>**PIvadi**|**_.4._**|**_.1._**|0,6684<br>(0.3851)|**_4_**||/|**_/_**|0<br>**0.1684**<br>(2.4206)|**_4_**|**_4_**|
|**lrfasUuW**<br>**Pdvwlrten **|**_4_**|**_/_**|/|**0.810**<br>(2.1442)|/|**_4_**|**_.1*_**|/-|0.1399<br>**(1.7906)**|**_4-_**|
|**o0.**<br>**P.dwh,**|||/2.416|**_-4-_**|(.4.364)|1|1|/|**_1._**|**00626**<br>to**0466)**|
|Ad). A-Sqwwod|0.9891|**04.46e**|09463|**0o662**|0e939|**0687**|**0.680)**|0 7792|0.7667|06737|

**t-UAdedc** In **pern_Ie; 6.)0g endst"** OW **an) ca** the **98%-lewvl, -nd)ae ekstdait Ugr8cAnooe i** the 956"bvl **lSdlCe_ etadto** **_WO%oa_ the 80%-eYW.**

In summary, the existence of a sizable privatization program that is relatively freely accessible to foreigners can be an important vehicle in attracting additional FDI inflows. In particular, privatizations that have the potential of improving the economic environment for investment projects by elimrinating existing bottlenecks in the availability of infrastructural services as well as local financing are important motivations for foreign investors to set up ventures in a developing country. In particular, in countries where infrastructural bottlenecks are a frequent complaint by foreign investors, such as Indonesia or the Philippines whose difficulties in providing a reliable energy and water supply made headlines in the international press, intensive privatization in these sectors might be capable of generating substantial amounts of additional FDI.

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