Title: Foreign direct investment in the Middle East and North Africa region

Authors: Said M. Elfakhani, Linda M. Matar

Addresses: School of Business, American University of Beirut, Bliss Street, P.O. Box 11-0236, Beirut, Lebanon. ' The Economic and Social Commission for Western Asia, Riad el-Solh Square, Beirut, Lebanon

Abstract: This paper examines foreign direct investment (FDI) inflows in the Middle Eastern and North African (MENA) region, and attempts to identify their possible explanatory determinants. Nineteen countries are sampled for an 11-year period (1990–2000), and then we present an overview of the relationship between these foreign inflows and gross fixed capital formation (domestic investment) of MENA countries. Our test findings show that the previous year|s FDI, country openness, return on investment, membership of the World Trade Organisation, and being an oil-exporting country are all valuable predictors of country FDI inflows, and this relationship has been positive in the 1990–2000 period. These results, however, were found to be time-dependent as some variables were significant in the first sub-period 1990–1995, while other variables were significant in the 1996–2000 sub-period.

Keywords: economic integration; foreign direct investment; FDI; determinants; funds flows; GCC; international trade; investment drivers; MENA; Middle East; North Africa.

DOI: 10.1504/JGBA.2007.012549

Journal for Global Business Advancement, 2007 Vol.1 No.1, pp.49 - 70

Published online: 22 Feb 2007 *

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