GLOBAL

                                                                                                                                                                                                                                             DEVELOPMENT STUDIES

                                                                            Copyright © 2007 International Development Options

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Volume Four                                                                   Winter 2006-Spring 2007                                                             Numbers 3-4.

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  Theme: Global Labor Migration and Emerging Trends in Development Finance: An Assessment of the

  Economic and Social Impact of Migrant (Worker) Remittances in Central America and the Caribbean 

   FOREIGN DIRECT INVESTMENT, ABSORPTIVE CAPACITY AND ECONOMIC GROWTH IN JAMAICA

 

   Marie Freckleton

   Department of Economics

   University of the West Indies

   Mona, Kingston 7, Jamaica

   Published Online: February 10, 2017

 

 

    ABSTRACT

 

This article examines the influence of absorptive capacity on the impact of foreign direct investment on economic growth in Jamaica. The methodology involves estimation of a growth equation using data for the period 1970-2004. Measures of human capital and financial sector development are used as indicators of absorptive capacity. The empirical results indicate that the two indicators of absorptive capacity are complementary to foreign direct investment. The article concludes that for those developing countries with low absorptive capacity, provision of costly incentives may constitute a waste of resources.

 

IDO        ISSN: 1093-8281                 Copyright © 2017 International Development Options

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