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Studying the Effect of Foreign Direct Investment on Economic Growth in Greater and Traditional Middle East Countries


  • Mehdi Behname

    (Department of Economics of the University of Shiraz)


This article tries to study whether foreign investment in the Greater and Traditional Middle East leads to economic growth. We have selected 21 countries of this zone for the time period 1980-2008. Due to lack of endogenous relationship between variables, the two equations have been estimated separately. FDI affects economic growth directly and indirectly. Indirect effect means interaction term. Infrastructures and economic stability have a special significance in foreign investment attraction. Furthermore, oil extraction has a positive effect on foreign investment attraction and economic growth while technology gap has a negative effect on FDI and GDP variables.

Suggested Citation

  • Mehdi Behname, 2011. "Studying the Effect of Foreign Direct Investment on Economic Growth in Greater and Traditional Middle East Countries," Economic Analysis, Institute of Economic Sciences, vol. 44(3-4), pages 35-43.
  • Handle: RePEc:ibg:eajour:v:44:y:2011:i:3-4:p:35-43

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    Cited by:

    1. Mehdi Behname, 2012. "Foreign Direct Investment and Economic Growth: Evidence from Southern Asia," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 2, pages 1-1, December.

    More about this item


    Foreign direct investment; economic growth; greater and traditional Middle East; panel data;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies


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