Foreign Direct Investment (FDI) and Tourism Sector are two significant factors both contributing to development, directly and indirectly, and also foreign exchange need of developing world. In this regard, the paper tries to determine if there is a relationship between FDI and tourism sector in the regard of the Jamaican case by using granger causality test. It can be said that Jamaica is a typical example, which is selected out of the developing world, in terms of both the importance of the tourism sector and FDI. According to the results within the framework of the econometric analysis, it is found out that Tourism Expenditures and FDI inflows are causally related, and the Granger causality is uni-directional running from FDI Inflows to Tourism Expenditures in the Jamaican Case. In other words, in Jamaica, FDI inflows are the cause and the tourism expenditures are the result, which can be theoretically expected. Since FDI inflows including the FDI in specifically tourism sector contribute to all the economy, by developing both tangible assets, such as infrastructure, and intangible assets, such as managerial skills of a country, it all contributes to the tourism sector as a service sector.
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