Locational Drivers of FDI in MENA Countries: A Spatial Attempt
AbstractThis study aims to analyze the locational drivers of FDI, with an emphasis on the role of market potential in MENA countries. Considering that the market does not necessarily comprise of the host economy but also trade opportunities in the region and in the rest of the world, this study distinguishes the country-specific, regional and trade-related market potential of the host MENA country in attracting FDI. It also examines the neighboring effects in locational choice. Using a panel of 18 countries covering the 1980-2001 time period, the model is estimated by Maximum Likelihood estimation method incorporating the possible spatial autocorrelation in the disturbances. The results imply that FDI in the MENA region is market oriented; as well as aiming at the domesic market in the host economy, it also utilises trade opportunities within the region.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2085.
Date of creation: May 2006
Date of revision:
Foreign Direct Investment; market potential; MENA region; spatial econometrics;
Find related papers by JEL classification:
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-AFR-2007-03-17 (Africa)
- NEP-ALL-2007-03-17 (All new papers)
- NEP-GEO-2007-03-17 (Economic Geography)
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