The Determinants of Foreign Direct Investment Flows to the Federal Region of Kurdistan

Almas Heshmati () and Rhona Davis ()
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Rhona Davis: University of Kurdistan Hawler

No 3218, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The flow of foreign direct investment (FDI) has increased dramatically in the last two decades. However, the distribution of FDI is highly unequal and the competition among countries to attract foreign investors is fierce. This report investigates the determinants of FDI inflows to developing countries in general and to the Federal Region of Kurdistan (FRK) in particular. The emphasis is on the impact of the Kurdistan Regional Government (KRG) active policy measures to encourage inward FDI to the region and at the same time to discourage outward FDI, respectively. We explore whether factors that affect FDI to developing countries affect Kurdistan differently and estimate the magnitude of heterogeneity and its effect by location and level of their development. The current regional investment law, the weaknesses and strengths of the law and infrastructures, institutions and their effectiveness in coordinating the efforts to facilitate inflow of FDI to the region, are investigated. Finally, we emphasize the need for the KRG to further promote investment in infrastructure and to impact economic growth, which in turn reinforce each other by attracting more investment in infrastructure and the productive sectors.

Keywords: Kurdistan; financial market; foreign direct investment; FDI; government policy; KRG (search for similar items in EconPapers)
JEL-codes: D53 E44 F21 G28 G38 O16 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2007-12
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: Heshmati, The Economy of Southern Kurdistan, New York: Nova Science Publishers, 2010

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