The law of growth and attraction: an endogenous model of absorptive capacities, FDI and income for MENA countries

Alaya MAROUANE (Université de Tunis), Dalila NICET-CHENAF (GREThA-GRES) and Eric Rougier ()

Cahiers du GRES from Groupement de Recherches Economiques et Sociales

Abstract: In this paper, we build a structural model of growth and we estimate it on panel data. We go further than the previous studies of Bende et al. (2000, 2003) or Li & Liu (2005), because we not only control for the endogenity of FDI towards growth, but we also control for the endogenity of FDI towards the other variables (trade openness, domestic investment, human development) that are likely to increase the effects of foreign investments on growth through the absorption capacities building. We show that this model brings in new and interesting results about the interactions between attraction, FDI and growth in MENA countries (Middle East and North Africa countries).

Keywords: FDI; Human capital; Growth; simultaneous equations; MENA (search for similar items in EconPapers)
JEL-codes: F1 O11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev
Date: 2008
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Working Paper: The law of growth and attraction: an endogenous model of absorptive capacities, FDI and income for MENA countries (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:grs:wpegrs:2008-21

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