Do Oil Rents Deter Foreign Direct Investment? The Case of Saudi Arabia

Mohammad Imdadul Haque
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Mohammad Imdadul Haque: Department of Management, College of Business Administration, Prince Sattam Bin Abdulaziz University, Saudi Arabia.

International Journal of Energy Economics and Policy, 2021, vol. 11, issue 1, 212-218

Abstract: The relationship between foreign direct investments (FDI) and natural resource endowment of a country is contentious. This study attempts to study this relationship for Saudi Arabia that is primarily an oil-producing country. In the process, it would also assess the role of institutions, trade openness, and domestic investments in attracting FDI. Using the methodology of cointegration over the data for the period 1984-2016, the study ascertains the presence of resource curse in terms of attracting FDI. The study discovers new findings as to the resource curse in attracting FDI are not because of institutional quality which has a positive relationship with FDI. The results also indicate the absence of crowding out of domestic investments. Finally, the study recommends channeling FDI to Greenfield projects with the maximum transfer of management and technology.

Keywords: Natural Resource; Institutions; Trade openness; Crowding-out; Cointegration (search for similar items in EconPapers)
JEL-codes: E02 F21 O43 P33 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2021-01-27

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