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Trade and Foreign Exchange Liberalization,Investment Climate, and FDI in the MENA Countries

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  • Marie-Ange VEGANZONES-VAROUDAKIS

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • SEKKAT

Abstract

Despite some progress in economic policy – in macroeconomic stability in the 1980s, and in structural reforms in the 1990s – the MENA countries have failed to attract foreign direct investments (FDI). This may be due to several factors. In this paper we empirically verify from a panel of 72 countries – among which are 8 MENA economies – that, during the 1990s, the low level of trade and foreign exchange liberalization compared to East Asia and Latin America played a determinant role in the low level of total FDI in the MENA economies, particularly in manufacturing. The paper also highlights the role of other factors, such as physical infrastructure, political environment and macroeconomic conditions, in explaining total FDI flows to the different regions. These results stress the importance of accelerating the pace of reform in the MENA economies.

Suggested Citation

  • Marie-Ange VEGANZONES-VAROUDAKIS & SEKKAT, 2004. "Trade and Foreign Exchange Liberalization,Investment Climate, and FDI in the MENA Countries," Working Papers 200430, CERDI.
    • Handle: RePEc:cdi:wpaper:852
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    9. Samir Saidi & Sami Hammami, 2018. "Do Transport Infrastructures Promote the Foreign Direct Investments Attractiveness? Empirical Investigation from Four North African Countries," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 21(67), pages 110-125, March.
    10. Heather D. Gibson & Thomas Vlassopoulo, 2007. "Capital Folws, capital account liberalisation and the southern Mediterranean countries," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 60(241), pages 137-165.
    11. Samir Saidi & Sami Hammami, 2016. "The Place of Transport Infrastructures among the Economic Factors of Foreign Direct Investment Attractiveness in the Meda-10 Region," American Journal of Economics and Business Administration, Science Publications, vol. 8(1), pages 23-34, March.
    12. Samir SAIDI & Sami HAMMAMI, 2016. "Causal Relationships Between Transports, Territorial Management And Foreign Direct Investment: Fresh Evidence For The Developing Countries," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 6(2), pages 32-45, June.
    13. Abid, Fathi & Bahloul, Slah, 2011. "Selected MENA countries' attractiveness to G7 investors," Economic Modelling, Elsevier, vol. 28(5), pages 2197-2207, September.
    14. Kamel Malik BENSAFTA & Gervasio SEMEDO, 2015. "Les structures économiques des pays du Maghreb : convergence ou divergence vis-à-vis de l'Europe ? (annule et remplace le DR LEO 2013-05)," LEO Working Papers / DR LEO 2092, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
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    17. Kamel Malik BENSAFTA & Gervasio SEMEDO, 2013. "Les structures économiques de pays du Maghreb : convergence ou divergence vis-à-vis de l'Europe ? (annulé et remplacé par le DR LEO 2015-11)," LEO Working Papers / DR LEO 1148, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    18. Adel BOGARI, 2021. "Exploring the Determinants Attractiveness to Foreign Direct Investments: Do Public Governance, Infrastructure and Macroeconomic Policies Matter?," Review of European Studies, Canadian Center of Science and Education, vol. 13(3), pages 1-63, September.
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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F15 - International Economics - - Trade - - - Economic Integration
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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