| Foreign direct investment (FDI) is a popular financial tool in especially developing countries to stimulate their economic growth. Caribbean developing countries inparticular have been receiving one of the world's highest FDI inflows relative to GDP;however, these countries have a rather small economic growth despite such high FDI inflows over the last 25 years. In order to investigate the reason for this paradigm relationship between FDI and economic growth in Caribbean developing countries the focus of this study was on different factors (political, educational, economical) and their relationship to FDI and therefore, economical growth. Moreover, it was studied why possible differences in economic growth exist between the investigated Caribbean developing countries.;This study investigated in detail the relationship between FDI and economic growth in 10 Caribbean developing countries for the time period of 1990--2009 using a correlationalquantitative approach. Furthermore, panel data analysis was used to numerical quantify what the relationship between FDI and economic growth was in the investigated Caribbean countries during 1990--2009 and what possible factors had the most influence on this relationship.;Results show that there was a weak negative relationship between FDI and economic growth for the investigated Caribbean developing countries from 1990 to 2009. Among the different political (political rights, civil liberties), educational (secondary school enrollment), and economic (growth, imports and exports, inflation, FDI) factors, only GDP per capita, exports, and human rights showed a weak positive correlation to FDI and therefore economic growth. There was no significant relationship observed between inflation and FDI, and political factors and FDI. |
