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The Relationship between Economic Freedom and FDI versus Economic Growth: Evidence from the GCC Countries

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  • Hichem Dkhili

    (College of Business Administration, Northern Border University, Arar 91431, Saudi Arabia)

  • Lassad Ben Dhiab

    (College of Business Administration, Northern Border University, Arar 91431, Saudi Arabia)

Abstract

This study aims to explain the role of economic freedom in attracting foreign investments and thus raising the level of economic growth. Through a study based on a sample composed of the Gulf Cooperation Council (GCC) countries. A standard model consisting of GCC countries (Saudi Arabia, United Arab Emirates, Qatar, Kuwait, and Oman) was used during the period from 1995 to 2017. We based on the analytical descriptive and secondly, we used a multivariate analysis based on the panel unit root test, the cointegration and finally the regression Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) following the existence of a long-term integration, which includes the modern standard methods to determine the role of economic freedom in raising foreign direct investment and thus economic growth in the second stage. The research findings from GCC countries support the literature, suggesting that there are indeed some indications that greater levels of economic freedom support higher rates of economic growth in a country.

Suggested Citation

  • Hichem Dkhili & Lassad Ben Dhiab, 2018. "The Relationship between Economic Freedom and FDI versus Economic Growth: Evidence from the GCC Countries," JRFM, MDPI, vol. 11(4), pages 1-17, November.
    • Handle: RePEc:gam:jjrfmx:v:11:y:2018:i:4:p:81-:d:184762
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