The Impact of Primary Energy Consumption, Trade Openness and Foreign Direct Investment on Economic Growth: Evidence from MENA Countries

Mousa Gowfal Selmey (), Bassam A. Elbialy (), Ibrahim Abdallah Abdelraouf Mohamed (), Abdullah Abdulaziz Alhumud () and Ibrahim Hamdy Sheta ()
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Mousa Gowfal Selmey: Department of Economics, Faculty of Commerce, Mansoura University, Mansoura, Egypt
Bassam A. Elbialy: Department of Business Administration, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh, Saudi Arabia
Ibrahim Abdallah Abdelraouf Mohamed: Faculty of Law, Mansoura University, Mansoura, Egypt
Abdullah Abdulaziz Alhumud: Department of Business Administration, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh, Saudi Arabia
Ibrahim Hamdy Sheta: Department of Economics, Faculty of Commerce, Mansoura University, Mansoura, Egypt; & College of Business Administration in Yanbu, Taibah University, Medina, Saudi Arabia

International Journal of Energy Economics and Policy, 2025, vol. 15, issue 6, 398-409

Abstract: This research examined how primary energy use, trade openness, and foreign direct investment influence economic growth in seven selected countries in the MENA region. Based on data availability (Algeria, Egypt, Morocco, the United Arab Emirates, Saudi Arabia, Oman, and Qatar) from 2000 to 2023, using three methods: the Panel Pooled Mean Group-Autoregressive Distributed Lag Model (PMG-ARDL), the Panel Fully Modified Least Squares (FMOLS), and the Panel Dynamics Least Squares (DOLS) models to explore the long-term relationships between these factors. The estimation results for PMG-ARDL, Panel-FMOLS, and Panel-DOLS indicate that capital, the labour force, primary energy consumption, and trade openness all have a statistically significant positive impact on economic growth in the MENA region. Foreign direct investment has a statistically significant negative impact on economic growth in the MENA region. In general, these results simply indicate that capital, labour forces, energy consumption, and trade openness are the main drivers of long-term economic growth in the MENA region. The study suggests enhancing investment in human and physical capital, increasing trade openness, and focusing on energy efficiency to stimulate long-term economic growth while reevaluating policies for attracting foreign direct investment and ensuring their alignment with developmental priorities.

Keywords: Primary Energy Consumption; Foreign Direct Investment; Trade Openness; MENA; PMG-ARDL (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:15:y:2025:i:6:id:20794

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DOI: 10.32479/ijeep.20794

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