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Is There Anything Special With Intra-Arab Capital Flows?

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  • Khalid Sekkat

    (University of Brussels)

Abstract

The paper examines the determinants if intra-Arab FDI inflows as compared to inflows from non-Arab countries. To this end, the analysis is conducted on two samples separately: one concerns intra-Arab FDI while the other focuses on FDI flows to Arabs from non-Arab countries. The results show a difference in the determinants of FDI inflows to Arab countries depending on the suppliers (Arab or non-Arab) and that Arabs are investing more than they should in other Arab-countries. However, the more striking result of the analysis is the difference in the determinants of Arab FDI inflows according to the supplier. Such a difference suggests that human capital, quality of institutions, infrastructure and openness don’t affect an Arab investor’s decision to locate in a given Arab country while they affect non-Arab investors. Hence, for an Arab country to attract more Arab FDI it doesn’t need necessarily to comply with the literature and international organization’s recommendations regarding openness and institutions.

Suggested Citation

  • Khalid Sekkat, 2013. "Is There Anything Special With Intra-Arab Capital Flows?," Working Papers 812, Economic Research Forum, revised Dec 2013.
    • Handle: RePEc:erg:wpaper:812
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    References listed on IDEAS

    as
    1. Péridy, Nicolas & Abedini, Javad, 2008. "The Greater Arab Free Trade Area(GAFTA): an Estimation of Its Trade Effects," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 848-872.
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    3. Pierre‐Guillaume Méon & Khalid Sekkat, 2004. "Does the Quality of Institutions Limit the MENA's Integration in the World Economy?," The World Economy, Wiley Blackwell, vol. 27(9), pages 1475-1498, September.
    4. Tarik Yousef & Mr. Hassan Al-Atrash, 2000. "Intra-Arab Trade: Is it too Little?," IMF Working Papers 2000/010, International Monetary Fund.
    5. Khalid Sekkat, 1996. "Regional integration among the Maghreb countries and free trade with the European union: a challenge for both sides of the mediterranean," ULB Institutional Repository 2013/7332, ULB -- Universite Libre de Bruxelles.
    6. Ben Hammouda, Hakim & Oulmane, Nassim & Bchir, Hédi & Sadni Jallab, Mustapha, 2006. "The Cost of non-Maghreb: Achieving the Gains from Economic Integration," MPRA Paper 13293, University Library of Munich, Germany.
    7. Henisz, Witold J, 2000. "The Institutional Environment for Multinational Investment," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 16(2), pages 334-364, October.
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