ANOTHER LOOK AT THE DETERMINANTS OF FOREIGN DIRECT INVESTMENT IN MENA COUNTRIES: AN EMPIRICAL INVESTIGATION

Sufian Eltayeb Mohamed () and Moise Sidiropoulos
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Sufian Eltayeb Mohamed: Department of Economic, Aristotle University of Thessaloniki

Journal of Economic Development, 2010, vol. 35, issue 2, 75-95

Abstract: The paper is concerned with the analysis of the main determinants of foreign direct investment in MENA countries. The estimation is run on the determinants of FDI in our sample which consist of 36 countries. 12 of these countries were in MENA countries and another 24 were the major recipients of FDI in their respective regions in developing countries. By employing a panel data methodology the study investigates whether the determinants of FDI are similar to the other FDI receiving developing countries. The study reveals that the key determinants of FDI inflows in MENA countries are the size of the host economy, the government size, natural resources and the institutional variables. The paper concludes that, countries that are receiving fewer foreign investments could make themselves more attractive to potential foreign investors. So, the policy makers in the MENA region should remove all barriers to trade, develop their financial system and build appropriate institutions.

Keywords: Foreign Direct Investment; Panel Data; Fixed Effects; MENA (search for similar items in EconPapers)
JEL-codes: C33 F21 F23 F43 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (95)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:35:y:2010:i:2:p:75-95

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