Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries
Ahmed Musabeh, Mehdi ZouaouiNorth Africa region is one of the wealthiest areas due to its natural resources and strategic location. But, it is still fragile according to economic indicators, especially investment environment and foreign direct investment, “FDI”, which represents a considerable challenge for governments and policymakers in these countries. This study investigates the main variables and policies that affect FDI inflows and evaluates the effectiveness of these policies on attracting FDI inflows in five North African countries, namely Algeria, Egypt, Libya, Morocco, and Tunisia. To achieve that aim, a panel data of North Africa countries is used within the timeframe of 1996 to 2013, the study has adopted three types of FDI related variables that may affect host country attractiveness: economic variables, institutional variables, and political variables. Also, we have investigated the influence of two kinds of investment policies on FDI: domestic FDI policies, and international FDI policies. The results indicate that the trade liberalization policies and integration into global business have a positive and significant correlation with FDI inflows growth. Additionally, the study also found that increasing domestic investment in host countries attracts more FDI. and adopting more efficient investment policies (investment freedom policies) are statistically significant and have a positive impact on FDI inflows growth in the North Africa region.
PDF Görünüm
Referanslar
- Abbott, A., Cushman, D. O., & De Vita, G. (2012). Exchange rate regimes and foreign direct investment flows to developing countries. Review of international economics, 20(1), 95–107. google scholar
- Adhikary, B. K. (2010). FDI, trade openness, capital formation, and economic growth in Bangladesh: a linkage analysis. International Journal of Business and Management, 6(1), 16. google scholar
- Aizenman, J., Chinn. M. D., and Ito, Hiro (2013). “The ‘impossible trinity’ hypothesis in an era of global imbalances: Measurement and testing. Review of International Economics, 21(3), 447–458. google scholar
- Arab Investment & Export Credit Guarantee Corporation (DHAMAN). (2014). FDI in Arab countries according to geographical distribution and enterprises, Quarterly Bulletin. Kuwait. Retrieved from http://dhaman.net/ar/ research-studies/investment-climate-report-latest/ google scholar
- Asghar, N., Nasreen, S., & Rehman, H. (2011). Relationship between FDI and economic growth in selected Asian countries: A panel data analysis. Review of Economics & Finance, 2, 84–96. google scholar
- Asiedu, E. (2002). On the determinants of foreign direct investment to developing countries: is Africa different? World development, 30(1), 107–119. google scholar
- Asiedu, E. (2006). Foreign direct investment in Africa: The role of natural resources, market size, government policy, institutions and political instability. The World Economy, 29(1), 63–77. google scholar
- Asiedu. (2004). Policy Reform and Foreign Direct Investment in Africa: Absolute Progress but Relative Decline. Development Policy Review, 41–48. google scholar
- Aziz, O. G., & Mishra, A. V. (2016). Determinants of FDI inflows to Arab economies. The Journal of International Trade & Economic Development, 25(3), 325–356. google scholar
- Balakrishnan, M. S., Muhammad, N., Sikdar, A., Rogmans, T., & Ebbers, H. (2013). The determinants of foreign direct investment in the Middle East North Africa region. International Journal of Emerging Markets. google scholar
- Banerjee, S. G., Oetzel, J. M., & Ranganathan, R. (2006). Private provision of infrastructure in emerging markets: do institutions matter? Development Policy Review, 24(2), 175–202. google scholar
- Banga, R. (2003). Impact of government policies and investment agreements on FDI inflows. Indian Council for Research on International Economic Relations, 1–43. Barassi, M. R., & Zhou, Y. (2012). The effect of corruption on FDI: a parametric and non-parametric analysis. European Journal of Political Economy, 28(3), 302–312. google scholar
- Biesenbender, S., & Tosun, J. (2014). Domestic politics and the diffusion of international policy innovations: How does accommodation happen? Global Environmental Change, 29, 424–433. google scholar
- Bellak, C., Leibrecht, M., & Damijan, J. P. (2009). Infrastructure endowment and corporate income taxes as determinants of foreign direct investment in Central and Eastern European countries. The World Economy, 32(2), 267–290. google scholar
- Berger, A., Busse, M., Nunnenkamp, P., & Roy, M. (2013). Do trade and investment agreements lead to more FDI? Accounting for key provisions inside the black box. International Economics and Economic Policy, 10(2), 247–275. google scholar
- Bevan, A. A., & Estrin, S. (2004). The determinants of foreign direct investment into European transition economies. Journal of Comparative Economics, 32(4), 775–787. google scholar
- Bhavan, T., Xu, C., & Zhong, C. (2011). Determinants and growth effect of FDI in South Asian economies: Evidence from a panel data analysis. International Business Research, 4(1), 43. google scholar
- Bilel, K., & Mouldi, D. (2011). The relationship between financial liberalization, FDI and economic growth: An empirical test for MENA countries. Economics and Finance Review, 1, 20–26. google scholar
- Boateng, A., Hua, X., Nisar, S., & Wu, J. (2015). Examining the determinants of inward FDI: Evidence from Norway. Economic Modelling, 47, 118–127. google scholar
- Boubakri, N., Cosset, J. C., Debab, N., & Valéry, P. (2013). Privatization and globalization: An empirical analysis. Journal of Banking & Finance, 37(6), 1898–1914. google scholar
- Buettner, T., & Ruf, M. (2007). Tax incentives and the location of FDI: Evidence from a panel of German multinationals. International Tax and Public Finance, 14(2), 151–164. google scholar
- Busse, M., Königer, J., & Nunnenkamp, P. (2010). FDI promotion through bilateral investment treaties: more than a bit? Review of World Economics, 146(1), 147–177. google scholar
- Buthe, T., & Milner, H. V. (2014). The politics of foreign direct investment into developing countries: increasing FDI through international trade agreements? American Journal of Political Science, 52(4), 741–762. google scholar
- Choi, J. J., Lee, S. M., & Shoham, A. (2016). The effects of institutional distance on FDI inflow: General environmental institutions (GEI) versus minority investor protection institutions (MIP). International Business Review, 25(1), 114–123. google scholar
- Dash, R. K., & Sahoo, P. (2010). Economic growth in India: the role of physical and social infrastructure. Journal of Economic Policy Reform, 13(4), 373–385. google scholar
- Drukker, D. M. (2003). Testing for serial correlation in linear panel-data models. The Stata journal, 3(2), 168–177. google scholar
- Duarte, L. D. R. V., Kedong, Y., & Xuemei, L. (2017). The Relationship between FDI, Economic Growth and Financial Development in Cabo Verde. International Journal of Economics and Finance, 9(5), 132. google scholar
- Dunning, J. H. (1988). The theory of international production. The International Trade Journal, 3(1), 21–66. google scholar
- Dunning, J. H. (1993). Internationalizing Porter’s diamond. Management International Review, 33(2), Dunning, J. H. (2002). Global Capitalism, FDI and competitiveness (Vol. 2). Edward Elgar Publishing. google scholar
- Dupasquier, C., & Osakwe, P. N. (2006). Foreign direct investment in Africa: Performance, challenges, and responsibilities. Journal of Asian Economics, 17(2), 241–260. google scholar
- Egger, P., & Winner, H. (2005). Evidence on corruption as an incentive for foreign direct investment. European Journal of Political Economy, 21(4), 932–952. google scholar
- Estrin, S., & Uvalic, M. (2014). FDI into transition economies: are the Balkans different? Economics of Transition, 22(2), 281–312. google scholar
- Feeny, S., Iamsiraroj, S., & McGillivray, M. (2014). Growth and foreign direct investment in the Pacific Island countries. Economic Modelling, 37, 332–339. google scholar
- Goodspeed, T., Martinez-Vazquez, J., & Zhang, L. (2011). Public policies and FDI location: Differences between developing and developed countries. FinanzArchiv: Public Finance Analysis, 67(2), 171–191. google scholar
- Guris, S., & Gozgor, K. (2015). Trade Openness and FDI Inflows in Turkey. Applied Econometrics and International Development, 15(2), 53–62. google scholar
- Hailu, Z. A. (2010). Demand side factors affecting the inflow of foreign direct investment to African countries: does capital market matter? International Journal of Business and Management, 5(5), 104. google scholar
- Henisz, W. J. (2002). The political constraint index (POLCON) dataset. University of Pennsylvania, Wharton School. Retrieved from https://mgmt.wharton.upenn.edu/faculty/heniszpolcon/polcondataset/ Heritage Foundation (2019). The index of economic freedom. Washington, D.C: google scholar
- Heritage Foundation. Retrieved from https://www.heritage.org/index/explore Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The stata journal, 7(3), 281–312. google scholar
- IMF, (2019) “Consumer price index, and gross fixed capital formation data” Washington, D. C. International Monetary Fund. Retrieved from https://www.imf.org/external/datamapper/PCPIPCH@WEO/OEMDC/ google scholar
- Kandiero, T., & Chitiga, M. (2006). Trade openness and foreign direct investment in Africa: economics. South African Journal of Economic and Management Sciences, 9(3), 355–370. google scholar
- Kaur, M., Khatua, A., & Yadav, S. S. (2016). Infrastructure development and FDI inflow to developing economies: Evidence from India. International Business Review, 58(6), 555–563. google scholar
- Kim, H. (2010). Political stability and foreign direct investment. International Journal of Economics and Finance, 2(3), 59–71. google scholar
- Kwok, C. C., & Tadesse, S. (2006). The MNC as an agent of change for host-country institutions: FDI and corruption. Journal of International Business Studies, 37(6), 767–785. google scholar
- Laabas, B., & Abdmoulah, W. (2009). Determinants of Arab intraregional foreign direct investments. Journal of Business & Policy Research, 4(2), 138–169. google scholar
- Mah, J. S. (2010). Foreign direct investment inflows and economic growth of China. Journal of Policy Modeling, 32(1), 155–158. google scholar
- Marc, A. (2011). Is foreign direct investment a cure for economic growth in developing countries? Structural model estimation applied to the case of the south shore Mediterranean countries. Journal of International Business and Economics, 11(4), 32–51. google scholar
- Mina, W. (2007). The location determinants of FDI in the GCC countries. Journal of Multinational Financial Management, 17(4), 336–348. google scholar
- Mohamed, S. E., & Sidiropoulos, M. G. (2010). Another look at the determinants of foreign direct investment in MENA countries: an empirical investigation. Journal of economic development, 35(2), 75. google scholar
- Mottaleb, K. A., & Kalirajan, K. (2010). Determinants of foreign direct investment in developing countries: A comparative analysis. Margin: The Journal of Applied Economic Research, 4(4), 369–404. google scholar
- Factbook, O. E. C. D. (2010). Economic, Environmental and Social Statistics/Organization for Economic Cooperation and Development. Onyeiwu, S., & Shrestha, H. (2004). Determinants of foreign direct investment in Africa. Journal of Developing Societies, 20(1-2), 89–106. google scholar
- Poelhekke, S., & van der Ploeg, F. (2013). Do natural resources attract non-resource FDI? Review of Economics and Statistics, 95(3), 1047–1065. google scholar
- Pradhan, R. P., Arvin, M. B., Hall, J. H., & Nair, M. (2017). Trade openness, foreign direct investment, and financegrowth nexus in the Eurozone countries. The Journal of International Trade & Economic Development, 26(3), 336–360. google scholar
- Sayan, S. (Ed.). (2009). Economic performance in the Middle East and North Africa: institutions, corruption and reform. Routledge. google scholar
- Te Velde, D. W. (2001). Policies towards foreign direct investment in developing countries: emerging best-practices and outstanding issues. London: Overseas Development Institute, 1–34. google scholar
- The World Bank, (2012). “World Development Indicators.” Microdata Library. Retrieved from https://data. worldbank.org/ google scholar
- Transparency International (1996–2014). The Corruption Perception Index. Retrieved from http://www. transparency.org google scholar
- UNCTAD, G. (2012). World investment report: Towards a new generation of investment policies. United Nations. New York and Geneva. google scholar
- UNCTAD,2018, United Nations Conference on Trade and Development (UNCTAD) Handbook of Statistics. Retrieved from https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96 google scholar
- UNCTAD, 2019, World Investment Report. Promoting Linkages, (FDI stock data) United Nations, Geneva and New York. Retrieved from https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Annex-Tables.aspx google scholar
- Wang, C., Hong, J., Kafouros, M., & Wright, M. (2012). Exploring the role of government involvement in outward FDI from emerging economies. Journal of International Business Studies, 43(7), 655–676. google scholar
- Wei, S. J. (2000). How taxing is corruption on international investors? Review of economics and statistics, 82(1), 1–11. google scholar
- Wooldridge, J. M. (2003). Further results on instrumental variables estimation of average treatment effects in the correlated random coefficient model. Economics letters, 79(2), 185–191. google scholar
- World Bank. (2011). Facing challenges and opportunities (Middle East and North Africa regional economic update). Washington DC, USA. Worldwide Governance Indicators, (2018) The Worldwide Governance Indicators (WGI) project. Retrieved from https://info.worldbank.org/governance/wgi/Home/Reports google scholar
- United Nations Conference on Trade and Development. (2001). World investment report 2001: Promoting linkages. UN. google scholar
- United Nations Conference on Trade and Development. (2013). World investment report 2013: Global value chains: Investment and trade for development. UN. google scholar
- Yang, J. H., Wang, W., Wang, K. L., & Yeh, C. Y. (2018). Capital intensity, natural resources, and institutional risk preferences in Chinese outward foreign direct investment. International Review of Economics & Finance, 55, 259–272. google scholar
- Yimer, A. (2017). Macroeconomic, political, and institutional determinants of FDI inflows to Ethiopia: An ARDL Approach. in studies on economic development and growth in selected African countries (pp. 123–151). Springer, Singapore. google scholar
- Young, S., Hood, N., & Hamill, J. (2017). Foreign multinationals and the British economy: Impact and policy. Routledge. google scholar
- Zhao, S. (2013). Privatization, FDI inflow and economic growth: evidence from China’s provinces, 1978–2008. Applied Economics, 45(15), 2127–2139. google scholar
Atıflar
Biçimlendirilmiş bir atıfı kopyalayıp yapıştırın veya seçtiğiniz biçimde dışa aktarmak için seçeneklerden birini kullanın
DIŞA AKTAR
APA
Musabeh, A., & Zouaoui, M. (2019). Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries. İktisat Politikası Araştırmaları Dergisi, 7(1), 1-20. https://doi.org/10.26650/JEPR635016
AMA
Musabeh A, Zouaoui M. Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries. İktisat Politikası Araştırmaları Dergisi. 2019;7(1):1-20. https://doi.org/10.26650/JEPR635016
ABNT
Musabeh, A.; Zouaoui, M. Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries. İktisat Politikası Araştırmaları Dergisi, [Publisher Location], v. 7, n. 1, p. 1-20, 2019.
Chicago: Author-Date Style
Musabeh, Ahmed, and Mehdi Zouaoui. 2019. “Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries.” İktisat Politikası Araştırmaları Dergisi 7, no. 1: 1-20. https://doi.org/10.26650/JEPR635016
Chicago: Humanities Style
Musabeh, Ahmed, and Mehdi Zouaoui. “Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries.” İktisat Politikası Araştırmaları Dergisi 7, no. 1 (Nov. 2024): 1-20. https://doi.org/10.26650/JEPR635016
Harvard: Australian Style
Musabeh, A & Zouaoui, M 2019, 'Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries', İktisat Politikası Araştırmaları Dergisi, vol. 7, no. 1, pp. 1-20, viewed 24 Nov. 2024, https://doi.org/10.26650/JEPR635016
Harvard: Author-Date Style
Musabeh, A. and Zouaoui, M. (2019) ‘Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries’, İktisat Politikası Araştırmaları Dergisi, 7(1), pp. 1-20. https://doi.org/10.26650/JEPR635016 (24 Nov. 2024).
MLA
Musabeh, Ahmed, and Mehdi Zouaoui. “Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries.” İktisat Politikası Araştırmaları Dergisi, vol. 7, no. 1, 2019, pp. 1-20. [Database Container], https://doi.org/10.26650/JEPR635016
Vancouver
Musabeh A, Zouaoui M. Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries. İktisat Politikası Araştırmaları Dergisi [Internet]. 24 Nov. 2024 [cited 24 Nov. 2024];7(1):1-20. Available from: https://doi.org/10.26650/JEPR635016 doi: 10.26650/JEPR635016
ISNAD
Musabeh, Ahmed - Zouaoui, Mehdi. “Policies and Variables affecting FDI: A Panel Data Analysis of North African Countries”. İktisat Politikası Araştırmaları Dergisi 7/1 (Nov. 2024): 1-20. https://doi.org/10.26650/JEPR635016