Examining Reinvestment in Trinidad and Tobago

Central Bank of Trinidad and Tobago Working Paper

Source: Central Bank of Trinidad and Tobago

Authors: Troy Taylor, Reshma Mahabir, Vishana Jagessar, Jason Cotton

From the document:

Over the years Trinidad and Tobago has been able to attract financial flows into the country in the form of Foreign Direct Investment (FDI). While for many years the bulk of FDI took the form of new investment in equity, in recent years there has been increased reinvestment of earnings by foreign firms in the domestic economy.

This paper seeks to explore this emerging area in the literature by examining the factors which influence reinvestment in Trinidad and Tobago. An empirical investigation finds that that economic growth and the level of energy exports are positively related to the level of reinvestment, while political risk and exchange rate volatility are disadvantageous factors.