Document Type

Master's Culminating Experience

Publication Date



The purpose of the paper is to examine the literature of foreign direct investment to evaluate what factors are determinant to attract inflows of foreign capital to Latin-American and Caribbean countries. The paper focuses on factors such as market size, degree of openness, rule of law, political stability, trade, regional integration, democracy, availability of natural resources, government efficiency, and infrastructure (i.e. energy generation, transportation systems, ports and telecommunication services). The regression results showed that the degree of openness, trade reform, education, market size, and infrastructure are the most important determinants of foreign investment. Based on my analysis, different Latin American countries offer “unique” characteristics that should be emphasized in national policies to attract additional foreign capital.