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Determining Factors of FDI Flows to Selected Caribbean Countries

Sookram, Sandra, Hosein, Roger, Boodram, Leera, Saridakis, George (2022) Determining Factors of FDI Flows to Selected Caribbean Countries. Journal of Risk and Financial Management, 15 (2). Article Number 48. ISSN 1911-8066. E-ISSN 1911-8074. (doi:10.3390/jrfm15020048) (KAR id:93001)

Abstract

Foreign direct investment (FDI) is a vital ingredient in achieving sustained growth in the Caribbean region. However, FDI inflows have been affected by issues such as market factors, trade barriers, costs factors, investment climate, political and foreign exchange stability. To this end, this paper examines the factors affecting FDI flows into Caribbean countries. We argue that Small Island Developing States in the Caribbean (SIDSC) can be affected by issues such as their small market size, high cost of energy, proneness to exogenous shocks from commodity prices, natural disasters and climate change. A point to note is that countries in the Caribbean with natural resources are expected to have biased FDI inflows. Additionally, countries throughout the Caribbean have different economic and productive structures and unique issues that can affect them based on their individual characteristics. To this end, a panel Autoregressive Distributed Lagged (ARDL) model is used to determine the factors affecting FDI inflows in the Caribbean over the period 2000 to 2019. The findings reveal that GDP growth, natural resource rents, gross capital formation and population growth are significant factors influencing growth in the Caribbean region.

Item Type: Article
DOI/Identification number: 10.3390/jrfm15020048
Uncontrolled keywords: foreign direct investment; Small Island Developing States; Caribbean
Subjects: H Social Sciences > HF Commerce > HF5351 Business
Divisions: Divisions > Kent Business School - Division > Department of Marketing, Entrepreneurship and International Business
Depositing User: George Saridakis
Date Deposited: 01 Feb 2022 16:33 UTC
Last Modified: 02 Feb 2022 09:55 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/93001 (The current URI for this page, for reference purposes)

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