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Impact and determinants of the foreign direct investment on the Libyan economy

Author

Listed:
  • Osama Hassan Abulkasim Muhamed
  • Siti Nurazira Binti Mohd Daud

Abstract

In this study, the researchers aimed to investigate the effect of the foreign direct investment (FDI) on Libya's economic growth. The study has also investigated the effect of the financial development and the institutional quality on the FDI inflow in the country. This paper used the auto-regressive distributed lag (ARDL) bound test approach for determining the time-series data in the period ranging between 1981 and 2013. The results showed that the FDI positively affected the economic growth in Libya and possessed a non-linear relationship (i.e., threshold effect) with the country's economic growth. With regards to the FDI determinants, the researchers observed that the financial development positively affected the FDI in the Libyan economy. On the other hand, institutional quality did not significantly affect the FDI. Hence, the results showed that the financial development is the main determinant of the FDI inflow, whereas the institutional quality does not affect the FDI inflow within the country.

Suggested Citation

  • Osama Hassan Abulkasim Muhamed & Siti Nurazira Binti Mohd Daud, 2022. "Impact and determinants of the foreign direct investment on the Libyan economy," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 15(3), pages 276-293.
    • Handle: RePEc:ids:ijtrgm:v:15:y:2022:i:3:p:276-293
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