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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)

  • 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.

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File URL: http://publi.cerdi.org/ed/2004/2004.30.pdf
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Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 200430.

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Length: 26
Date of creation: 2004
Date of revision:
Handle: RePEc:cdi:wpaper:852

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Citations

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Cited by:
  1. Heather D. Gibson & Thomas Vlassopoulo, 2007. "Capital Folws, capital account liberalisation and the southern Mediterranean countries," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 60(241), pages 137-165.
  2. Hisarciklilar, Mehtap & Kayam, Saime Suna & Kayalica, Ozgur, 2006. "Locational Drivers of FDI in MENA Countries: A Spatial Attempt," MPRA Paper 2085, University Library of Munich, Germany.
  3. Abid, Fathi & Bahloul, Slah, 2011. "Selected MENA countries' attractiveness to G7 investors," Economic Modelling, Elsevier, vol. 28(5), pages 2197-2207, September.
  4. Miria Pigato, 2009. "Strengthening China's and India's Trade and Investment Ties to the Middle East and North Africa," World Bank Publications, The World Bank, number 2626, October.
  5. Heather D. Gibson & Nicholas T. Tsaveas & Thomas Vlassopoulos, 2006. "Capital Flows, Capital Account Liberalisation and the Mediterranean Countries," Working Papers 33, Bank of Greece.
  6. Daniele, Vittorio & Marani, Ugo, 2006. "Do institutions matter for FDI? A comparative analysis for the MENA countries," MPRA Paper 2426, University Library of Munich, Germany.

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