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Determinants of FDI inflows to Arab economies

journal contribution
posted on 02.11.2020, 00:00 by Omar AzizOmar Aziz, AV Mishra
The paper studies location determinants of foreign direct investment (FDI) to 16 Arab economies over the period from 1984 to 2012, by employing Arellano–Bover/Blundell–Bond linear dynamic panel data estimation. We find that market size, trade openness, preferential trade agreements and financial development have significant positive impact on FDI inflows to Arab economies. FDI in Arab economies appears to be resource seeking since the total oil supply variable is positive and significant. The paper finds that better institutions and educated labour force may play a key role in attracting FDI inflows. We suggest that Arab economies should sequence their economic policy measures with the institutional ones, beginning with a focus on privatization and trade liberalization, and subsequently shift to improvement in economic growth.

History

Volume

25

Issue

3

Start Page

325

End Page

356

Number of Pages

32

eISSN

1469-9559

ISSN

0963-8199

Publisher

M D P I AG

Language

en

Peer Reviewed

Yes

Open Access

No

Acceptance Date

28/05/2015

External Author Affiliations

University of Western Sydney

Era Eligible

Yes

Journal

The Journal of International Trade & Economic Development