Determining Factors of FDI Flows to Selected Caribbean Countries

Round 1

Reviewer 1 Report

This paper examines the factors that influence FDI inflows into nine Caribbean countries for the period 2000-2019. The empirical findings show that exports, GDP growth, population growth, gross capital formation and natural resource are among the best explanatory variables of FDI.

The paper is interesting.

Comments:

1). I would suggest the authors to update the references and previous literature review section. For instance, Siriopoulos et al (2021) reported that governance quality and adoption of International Financial Reporting Standards on countries of the Gulf Cooperation Council, which also are countries with natural resources.

2). I would suggest the authors to better explain and justify the choice of explanatory variables used in their modeling approach.

3). The empirical findings are poorly discussed in Section 3. I would suggest the authors to expand the discussion and the implications of their findings. Also, it would be interesting if they would compare their results with hose reported in the international literature.

4). I would also propose the authors to increase their sample by including year 2020.

Additional References

Siriopoulos, C., A. Tsagkanos, A. Svingou, and E. Daskalopoulos. 2021. Foreign Direct Investment in GCC Countries: The Essential Influence of Governance and the Adoption of IFRS. Journal of Risk and Financial Management, 14: 264. https://doi.org/10.3390/jrfm14060264

Evangelos Daskalopoulos, Anastasios Evgenidis, Athanasios Tsagkanos and Costas Siriopoulos (2016). Assessing variations in foreign direct investments under international financial reporting standards (IFRS) adoption, macro-socioeconomic developments and credit ratings. Investment Management and Financial Innovations, 13(3-2), 328-340. doi:10.21511/imfi.13(3-2).2016.05

Author Response

Please see Attachments

Author Response File: Author Response.docx

Reviewer 2 Report

A paper on FDI determinants in Caribbean countries is an interesting endeavor, although the region, as the authors recognize, is very diverse. Despite the interest in the topic, I find the paper lack in several aspects that the authors need to address before publication:

• the authors need to better explain the rationale for the study, i.e., why is an investigation on FDI determinants for these countries needed and what are the challenges raised by such an investigation
• the authors need to explain which is the novelty they bring to the literature on FDI and which are their main contributions to the development of the studies on FDI
• in the Introduction, I suggest the authors present details on the diversity of economies in the Caribbean region and what is the impact of this diversity on the study of FDI
• I liked the way the hypotheses were deducted based on existing literature
• the authors use a PMG estimator to discover the relationship between FDI and independent variables, but they do not explain why such a model is useful (why not a traditional OLS or GMM panel?) and do not present any tests to show PMG is viable: stationarity of variables, cointegration, etc.; this is a must in a valid scientific endeavor
• moreover, building on the diversity of countries in the region, a valid question is how was this diversity considered when building the model?
• the Conclusions are decent and consider the results

Author Response

Please see attached.

Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

Dear authors,

Thank you for the revising version.