Labor Market Flexibility and FDI Flows: Evidence from Oil-Rich GCC and Middle Income Countries

Wasseem Mina () and Louis Jaeck ()
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Louis Jaeck: Department of Economics and Finance, College of Business and Economics, United Arab Emirates University

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: In this paper we empirically examine the impact of labor market flexibility on FDI flows to oil-rich GCC and compare it to middle income countries in 2006-2011. We account for potential endogeneity and nonstationarity and adopt system GMM and IV estimation methodologies. Our findings show that in middle income countries overall flexibility increases FDI flows under both system GMM and IV methodologies. In GCC countries overall LMF decreases FDI flows under system GMM methodology. Results also show a positive “GCC region” influence outweighing the negative flexibility influence. Growth potential and infrastructure development matter for both GCC and middle income countries.

Pages: 32 pages
Date: 2015-05-08
New Economics Papers: this item is included in nep-ara and nep-ene
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http://icepp.gsu.edu/files/2015/07/ispwp1501.pdf (application/pdf)

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Working Paper: Labor Market Flexibility and FDI Flows: Evidence from Oil-Rich GCC and Middle Income Countries (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ays:ispwps:paper1501

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