Working Paper Series: Special Edition of 2016 to 2018 Interns

Table of Contents 1.0 Introduction.................................................................................................................... 84 2.0 Literature Review and Theoretical Underpinnings...................................................... 86 2.1 FDI ..................................................................................................................................................... 86 2.2 Trade Openness ................................................................................................................................ 87 2.3 Openness and Growth ...................................................................................................................... 89 3.0 Background and Stylized Facts ..................................................................................... 90 3.1 Economic Performance..................................................................................................................... 91 3.2 Openness in the ECCU: FDI and Trade Openness ............................................................................ 94 3.2.1 FDI .............................................................................................................................................. 94 3.2.2 Trade openness.......................................................................................................................... 95 4.0 Empirical Methodology ................................................................................................... 97 4.1 Model ................................................................................................................................................ 97 4.2 Empirical methodology ..................................................................................................................... 99 5.0 Empirical Results and Analysis .................................................................................... 102 5.1 Unit Root test.................................................................................................................................. 102 5.2 Cointegration test ........................................................................................................................... 103 5.3 long-run Estimation with DOLS....................................................................................................... 104 5.4 VECM results ................................................................................................................................... 104 5.4 Granger Causality............................................................................................................................ 105 5.5 Structural Breaks............................................................................................................................. 106 6.0 Conclusion ..................................................................................................................... 106 7.0 Recommendations ......................................................................................................... 107 Appendix.................................................................................................................................... 113

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