For my economic thesis paper at Belmont University, I conducted a study on the impact of foreign direct investment (FDI) on developing versus developed nations. The goal of this study was to understand the key factors that contribute to the growth of developing nations as compared with developed ones. Using the International Monetary Fund’s (IMF) categorizations, I divided 80 nations into developed and developing economies. I then estimated a series of multivariate regression models, one using only developed nations, the other using developing nations, and the last using a pooled equation for both. My research revealed that foreign investments of $1 billion into a developing economy can increase national GDP by as much as 0.16 percent. More importantly, these models indicated that increasing a country’s score on the United Nations Human Development Index (HDI) by 0.1 can result in a GDP increase of 1.2 percent for developing nations and 3.6 percent for developed nations. It’s important to note that increasing the HDI score for developed nations is unlikely, given that most of them have scores already at the upper limit of the index. Finally, it was also determined that an increase in property rights, based on The Heritage Foundation’s Property Rights Index, could result in an increase of up to 0.2 percent in GDP for developing nations. The results of this study ultimately determined FDI to have a net positive effect on developing economies and little to no effect on those already developed. Further, investment in human capital was found to be the most significant contributor to a developing nation’s ability to increase GDP. A dichotomy does in fact exist between developed and developing economies when it comes to the power of foreign direct investment.