Abstract
This paper analyzes the location of export-oriented manufacturing investment. The analysis focuses on direct investment in the Caribbean Basin, using micro data for all reported manufacturing plant openings from 1984–87. We test a broad range of influences on country selection and compare the results with the existing literature on foreign direct investment in less-developed countries. The probability of country selection was estimated with a conditional logit model. The estimates were then used to predict the location of Caribbean Basin investments made in 1988 and 1989. Twelve independent variables were tested. Six variables had a statistically significant, positive relationship with plant location: per capita GNP, exchange rate devaluation, the length of income tax holidays, the size of free trade zones, political stability, and manufacturing concentration. Negative relationships were found for the wage rate, inflation rate, transportation cost, and profit repatriation restrictions.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Author information
Authors and Affiliations
Additional information
*Douglas P. Woodward is Research Economist and Assistant Professor of Economics at the University of South Carolina. He is co-author of The New Competitors, a book on foreign direct investment in the United States.
**Robert J. Rolfe is Associate Professor of Accounting at the University of South Carolina. His related research has appeared in the Journal of the American Taxation Association and the International Tax Journal.
Rights and permissions
About this article
Cite this article
Woodward, D., Rolfe, R. The Location of Export-Oriented Foreign Direct Investment in the Caribbean Basin. J Int Bus Stud 24, 121–144 (1993). https://doi.org/10.1057/palgrave.jibs.8490228
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1057/palgrave.jibs.8490228