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The impact of private capital flows on economic growth in the MENA region

Author

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  • Ben-Salha Ousama

    (Department of Economics, Northern Border University, 91431, Arar, Saudi Arabia; Department of Economics, University of Sousse, 4054, Sousse, Tunisia; Economic Research Forum, 12311, Giza, Egypt)

  • Zmami Mourad

    (Department of Economics, Northern Border University, 91431, Arar, Saudi Arabia; Department of Economics and Quantitative Methods, University of Tunis, 1007, Tunis, Tunisia)

Abstract

The aim of the article is to conduct an empirical analysis of the impact of aggregate and disaggregate private capital flows on economic growth in eleven MENA countries between 1980 and 2018. Unlike prior empirical studies, the fixed effect panel quantile approach developed by Canay (2011) is implemented. Findings suggest that there is a significant difference in the effects of private capital flows on economic growth across lower and higher quantiles. More specifically, the effects of total private capital flows, foreign direct investment flows, portfolio flows and debt flows are positive and statistically significant only for low and medium quantiles, indicating that the enhancing impact of private capital flows in terms of economic growth is only confirmed in countries with relatively low and medium growth rates. Moreover, debt flows affect economic growth in countries recording high growth rates, stressing the importance of financial development in routing those flows into the most productive projects in the economy.

Suggested Citation

  • Ben-Salha Ousama & Zmami Mourad, 2020. "The impact of private capital flows on economic growth in the MENA region," Economics and Business Review, Sciendo, vol. 6(3), pages 45-67, August.
    • Handle: RePEc:vrs:ecobur:v:6:y:2020:i:3:p:45-67:n:3
    DOI: 10.18559/ebr.2020.3.3
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    More about this item

    Keywords

    private capital flows; economic growth; MENA; fixed effect panel quantile;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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