IDEAS home Printed from https://ideas.repec.org/a/tec/journl/v10y2020i1p318-332.html
   My bibliography  Save this article

The Influence of Human Development, Institutional Quality and ISIS Emergence on Foreign Direct Investment in Iraq

Author

Listed:
  • Zeravan Abdulmuhsen Asaad

    (Cihan University - Duhok, University of Duhok, Kurdistan Region - Iraq)

  • Bayar MohamedRasheed Marane

    (Cihan University - Duhok, University of Duhok, Kurdistan Region - Iraq)

Abstract

This study investigates the influence of human development and institutional quality on the foreign direct investment net inflows on the gross domestic product in Iraq for the period (2004-2016) by using OLS regression. The empirical results show that governance sub-indicators do not actually matter much in attracting Foreign Direct Investment (FDI) inflows in Iraq. This variable shows fixed results with a different sign; the Political Stability (PS), Government Effectiveness (GE) and Rule of Law (RL) are the sub-indicators of the governance with a positive sign which is insignificant, while the Voice and Accountability (VA), Regulatory Quality (RQ) and Control of Corruption (CC) are the sub-indicators of the governance index with a negative sign and an insignificant impact on FDI inflows. The value of Worldwide Governance Indicators (WGI) coefficient is negative and significant at 10% level. Hence it has been concluded that the explanatory variables are negatively associated with the dependent variable FDI. In contrast, the Human Development Index (HDI) has a positive and significant impact on FDI inflows. This study found that Islamic State of Iraq and Syria (ISIS) emergence after (2013) had a significant coefficient, meaning that ISIS has affected the level of FDI inflows.

Suggested Citation

  • Zeravan Abdulmuhsen Asaad & Bayar MohamedRasheed Marane, 2020. "The Influence of Human Development, Institutional Quality and ISIS Emergence on Foreign Direct Investment in Iraq," Technium Social Sciences Journal, Technium Science, vol. 10(1), pages 318-332, August.
    • Handle: RePEc:tec:journl:v:10:y:2020:i:1:p:318-332
    as

    Download full text from publisher

    File URL: https://techniumscience.com/index.php/socialsciences/article/download/1402/499
    Download Restriction: no
    File URL: https://techniumscience.com/index.php/socialsciences/article/view/1402
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Muhammad Arshad Khan & Shujaat Ali Khan, 2011. "Foreign Direct Investment and Economic Growth in Pakistan: A Sectoral Analysis," PIDE-Working Papers 2011:67, Pakistan Institute of Development Economics.
    2. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "Governance Matters VI: Aggregate and Individual Governance Indicators, 1996-2006," Policy Research Working Paper Series 4280, The World Bank.
    3. Montiel, Peter & Reinhart, Carmen M., 1999. "Do capital controls and macroeconomic policies influence the volume and composition of capital flows? Evidence from the 1990s," Journal of International Money and Finance, Elsevier, vol. 18(4), pages 619-635, August.
    4. World Bank, 2017. "World Development Indicators 2017," World Bank Publications - Books, The World Bank Group, number 26447, December.
    5. World Bank, 2016. "World Development Indicators 2016," World Bank Publications - Books, The World Bank Group, number 23969, December.
    6. Asaad, Zeravan, 2014. "The Economic determinants of foreign direct investment inward to Iraq for period (2004-2011)," MPRA Paper 103523, University Library of Munich, Germany, revised 04 Apr 2014.
    7. Claessens, Stijn & Yurtoglu, B. Burcin, 2013. "Corporate governance in emerging markets: A survey," Emerging Markets Review, Elsevier, vol. 15(C), pages 1-33.
    8. repec:elg:eebook:14347 is not listed on IDEAS
    9. David A. Wernick & Jerry Haar & Latika Sharma, 2014. "The Impact of Governing Institutions on Foreign Direct Investment Flows: Evidence from African Nations," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 5(2), pages 1-12, March.
    10. Turan Subasat & Sotirios Bellos, 2013. "Governance and foreign direct investment in Latin America: A panel gravity model approach," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 50(1), pages 107-131, May.
    11. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    12. Buchanan, Bonnie G. & Le, Quan V. & Rishi, Meenakshi, 2012. "Foreign direct investment and institutional quality: Some empirical evidence," International Review of Financial Analysis, Elsevier, vol. 21(C), pages 81-89.
    13. Reiter, S.L. & Steensma, H. Kevin, 2010. "Human Development and Foreign Direct Investment in Developing Countries: The Influence of FDI Policy and Corruption," World Development, Elsevier, vol. 38(12), pages 1678-1691, December.
    14. Oded Löwenheim, 2008. "Examining the State: a Foucauldian perspective on international ‘governance indicators’," Third World Quarterly, Taylor & Francis Journals, vol. 29(2), pages 255-274.
    15. Zühal Kurul & A. Yasemin Yalta, 2017. "Relationship between Institutional Factors and FDI Flows in Developing Countries: New Evidence from Dynamic Panel Estimation," Economies, MDPI, vol. 5(2), pages 1-10, May.
    16. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2006. "Governance matters V: aggregate and individual governance indicators for 1996 - 2005," Policy Research Working Paper Series 4012, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leena Ajit Kaushal, 2022. "Institutional and economic determinants of Indian OFDI," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2147648-214, December.
    2. repec:thr:techub:10031:y:2022:i:1:p:397-407 is not listed on IDEAS
    3. Bayar Marane, 2022. "Iraq Stock Exchange Performance Determinants: A literature review," Technium Social Sciences Journal, Technium Science, vol. 31(1), pages 397-407, May.
    4. Zeravan Abdulmuhsen Asaad & Amjad Saber Al-Delawi & Omed Rafiq Fatah & Awaz Mohamed Saleem, 2023. "Oil Exports, Political Issues, and Stock Market Nexus," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 362-373, January.
    5. Zeravan Abdulmuhsen Asaad & Amjad Saber Al-Delawi, 2022. "Iraqi Stock Exchange Reactions to the Oil price, Covid-19 Aftermath, and the Saudi Stock Exchange Movements pre-during Vaccination Program," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 18-30, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:thr:techub:10010:y:2020:i:1:p:318-332 is not listed on IDEAS
    2. Dang, Man & Henry, Darren & Nguyen, Manh Toan & Hoang, Viet Anh, 2018. "Cross-country determinants of ownership choices in cross-border acquisitions: Evidence from emerging markets," Journal of Multinational Financial Management, Elsevier, vol. 44(C), pages 14-35.
    3. Binici, Mahir & Hutchison, Michael & Schindler, Martin, 2010. "Controlling capital? Legal restrictions and the asset composition of international financial flows," Journal of International Money and Finance, Elsevier, vol. 29(4), pages 666-684, June.
    4. Eric M. Bosire, 2019. "Foreign Direct Investments into Eastern Africa Region: The Governance Paradox," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 169-182.
    5. Fon, Roger Mongong & Filippaios, Fragkiskos & Stoian, Carmen & Lee, Soo Hee, 2021. "Does foreign direct investment promote institutional development in Africa?," International Business Review, Elsevier, vol. 30(4).
    6. Sena Kimm Gnangnon, 2017. "The Impact of Multilateral Trade Liberalisation on Economic Development: Some Empirical Evidence," Economic Affairs, Wiley Blackwell, vol. 37(3), pages 397-410, October.
    7. Yusuf Daiyabu Abdulkarim & Nor Aziah Abdul Manaf & Hafizah Mohamad Hsbollah, 2022. "Validating Public Governance Quality Measurement Scale with Application to Domestic Private Investment in Renewable Energy for Electricity Generation," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 360-368, March.
    8. Yilmaz BAYAR, & Naib ALAKBAROV, 2016. "CORRUPTION AND FOREIGN DIRECT INVESTMENT INFLOWS IN EMERGING MARKET ECONOMIES Usak University, Department of Economics, Usak, Turkey," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 5(2), pages 1-47, July.
    9. Manamba EPAPHRA & John MASSAWE, 2017. "The Effect of Corruption on Foreign Direct Investment: A Panel Data Study," Turkish Economic Review, KSP Journals, vol. 4(1), pages 19-54, March.
    10. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    11. Panicos Demetriades & David Fielding, 2012. "Information, Institutions, And Banking Sector Development In West Africa," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 739-753, July.
    12. Dreher, Axel & Fuchs, Andreas & Langlotz, Sarah, 2019. "The effects of foreign aid on refugee flows," European Economic Review, Elsevier, vol. 112(C), pages 127-147.
    13. Mara Pirovano & Jacques Vanneste & André Van Poeck, 2011. "Portfolio and Short-term Capital Inflows to the New and Potential EU Countries: Patterns and Determinants," Chapters, in: Wim Meeusen (ed.), The Economic Crisis and European Integration, chapter 12, Edward Elgar Publishing.
    14. Elert, Niklas & Henrekson, Magnus, 2017. "Entrepreneurship and Institutions: A Bidirectional Relationship," Working Paper Series 1153, Research Institute of Industrial Economics, revised 05 May 2017.
    15. Oludele Emmanuel Folarin, 2019. "Financial reforms and industrialisation: evidence from Nigeria," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 21(1), pages 166-189, June.
    16. Sèna Kimm Gnangnon, 2020. "Trade Openness and Diversification of External Financial Flows for Development: An Empirical Analysis," South Asian Journal of Macroeconomics and Public Finance, , vol. 9(1), pages 22-57, June.
    17. Crafts, Nicholas & Toniolo, Gianni, 2008. "European Economic Growth, 1950-2005: An Overview," CEPR Discussion Papers 6863, C.E.P.R. Discussion Papers.
    18. Cohen, Marc J. & Lemma, Mamusha, 2011. "Agricultural extension services and gender equality: An institutional analysis of four districts in Ethiopia," ESSP working papers 28, International Food Policy Research Institute (IFPRI).
    19. Paitoon Kraipornsak, 2018. "Good Governance And Economic Growth: An Investigation Of Thailand And Selected Asian Countries," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 6(1), pages 93-106.
    20. McArthur, John W. & Rasmussen, Krista, 2018. "Change of pace: Accelerations and advances during the Millennium Development Goal era," World Development, Elsevier, vol. 105(C), pages 132-143.
    21. Lujala, Päivi, 2018. "An analysis of the Extractive Industry Transparency Initiative implementation process," World Development, Elsevier, vol. 107(C), pages 358-381.

    More about this item

    Keywords

    Foreign Direct Investment; Human Development; Institutional Quality; Governance Sub-Indicators;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tec:journl:v:10:y:2020:i:1:p:318-332. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tasente Tanase (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.