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OFDI Impact on Private Investment in the Gulf Economies

Author

Listed:
  • Syed Hasanat Shah

    (School of Economics, Jilin University, Changchun 130012, China
    Public Sector Economy Research Centre, Jilin University, Changchun 130012, China)

  • Waqar Ameer

    (School of Economics and trade, Hunan University, Yuelushan District, Changsha 410079, China)

  • Sarath Delpachitra

    (Institute of Business Research, University Of Economics, 59C Nguyen Dinh Chieu Street DC3, Ho Chi Minh City 700000, Vietnam)

Abstract

Gulf Cooperation Council (GCC) countries are highly dependent on hydrocarbons, which puts them at great risk to maintain stability in the long run. GCC countries need private investment to reduce their reliance on state and diversify their economies apart from hydrocarbon. The role of private investment is crucial to economic stability and development. Literature suggests that outward foreign direct investment (OFDI) can play a vital role in promoting private investment. Therefore, using feasible generalized least squares (FGLS) and panel corrected standard error (PCSE) techniques, we checked the impact of the GCC countries OFDI on private investment and found that OFDI significantly complement private investment in the GCC countries. The complementary impact of OFDI on private investment in the GCC countries can be used as a tool to promote private investment, diversify their economies and hedge against the pitfalls of addiction to the hydrocarbon.

Suggested Citation

  • Syed Hasanat Shah & Waqar Ameer & Sarath Delpachitra, 2020. "OFDI Impact on Private Investment in the Gulf Economies," Sustainability, MDPI, vol. 12(11), pages 1-13, June.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:11:p:4492-:d:365987
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    References listed on IDEAS

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