FDI in the European Union and Mena Countries: Institutional and Economic Determinants
AbstractFDI flows to the Middle East and North Africa countries (MENA) have been relatively low when compared to the neighbouring European Union (EU) and to other developing and emerging countries. Furthermore, empirical research on FDI in these countries is relatively scarce. In this paper we use panel data regressions and consider a period of 9 years (since mid nineties) to investigate possible differences in the determinants of FDI performance in these regions. In particular, we use a panel of 42 countries which include 17 MENA countries and 25 European countries. Unlike previous studies, we consider the inward FDI performance index, as provided by UNCTAD, as dependent variable and include both institutional and macroeconomic variables as possible determinants of FDI. The aim is to investigate whether there are region-specific factors that are significant for FDI performance. We conclude that there are some significant differences on the institutional determinants of FDI performance, namely in what concerns Investment Freedom, Government Size and Trade Freedom.
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Bibliographic InfoPaper provided by University of Evora, CEFAGE-UE (Portugal) in its series CEFAGE-UE Working Papers with number 2009_09.
Length: 23 pages
Date of creation: 2009
Date of revision:
Foreign Direct Investment; Determinants; Institutions; Middle East North Africa countries (MENA); European Union (EU); Panel Data.;
Other versions of this item:
- Galego Aurora & Caetano José Manuel, 2012. "Institutional and Economic Determinants of FDI: A Comparison between the European Union and the MENA Region," Review of Middle East Economics and Finance, De Gruyter, vol. 8(1), pages 1-23, August.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-30 (All new papers)
- NEP-ARA-2009-05-30 (MENA - Middle East & North Africa)
- NEP-EEC-2009-05-30 (European Economics)
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