Do Developing Countries Benefit from Foreign Direct Investments? An Analysis of Some Arab and Asian Countries

Weshah Razzak and El Mostafa Bentour

Review of Middle East Economics and Finance, 2013, vol. 9, issue 3, 357-388

Abstract: In addition to the widely-believed positive effects on growth, employment, and wages, foreign direct investments (FDI) are often perceived as sources of funds for development. Developing countries, especially low income and emerging economies, welcome FDIs because of their favorable budgetary implications. All of this resulted in increasing global FDIs. We discuss some specification and estimation problems that might affect the estimation of the rate of returns on FDI, and provide new figures for a number of FDI-receiving Arab countries. We compare the results to those of some Asian countries, and discuss the policy implications. There is evidence that Arab countries have, relatively, benefited from their efforts to open their economies, to reform their institutions and to attract FDIs.

Keywords: rate of return on FDI; estimation and specification problems; panel data (search for similar items in EconPapers)
JEL-codes: C13 C14 C21 C23 C26 O24 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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DOI: 10.1515/rmeef-2012-0031

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