Foreign direct investment (FDI) has been deemed as one of the main factors underlying the strong growth rates experienced by the Spanish economy for the last 30 years. In addition, the Spanish accession to the European Community (EC) in 1986 has involved a new boost in FDI, that would reflect the favorable prospects for the country's economic future faced with the challenges of the Single European Market. In Bajo-Rubio [4] a first attempt was made in order to test in a systematic way the main hypotheses proposed in the literature to explain the determinants of FDI, both from a macroeconomic and sectorial point of view. The aim of this paper is to provide some more robust evidence on the hypotheses tested in the first part of the paper (i.e., the allocation over time of gross aggregate FDI inflows in the Spanish economy for the 1964-89 period) using cointegration analysis. -from Authors
