Determinants of US direct foreign investment in the Caribbean

This study evaluates two groups of variables (economic and structural/locational) associated with US short-and long-run direct foreign investment (DFI) in the Caribbean over the 1983-1994 period. Separate generalized least square models for the Caribbean and Latin America were estimated to determine whether differences existed between the two regions as to the variables associated with the levels of DFI. This helped provide insights as to the strategies that should be maintained or introduced to give the Caribbean a competitive edge in attracting the limited amounts of US DFI likely to be available for investment in the Western hemisphere.