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FDI in the European Union and Mena Countries: Institutional and Economic Determinants

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  • José Caetano

    () (Universidade de Evora, Departamento de Economia, CEFAGE-UE)

  • Aurora galego

    () (Universidade de Evora, Departamento de Economia, CEFAGE-UE)

Abstract

FDI 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.

Suggested Citation

  • José Caetano & Aurora galego, 2009. "FDI in the European Union and Mena Countries: Institutional and Economic Determinants," CEFAGE-UE Working Papers 2009_09, University of Evora, CEFAGE-UE (Portugal).
  • Handle: RePEc:cfe:wpcefa:2009_09
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    References listed on IDEAS

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    1. repec:ssi:jouesi:v:1:y:2014:i:4:p:230-238 is not listed on IDEAS
    2. Mahia, Ramon & de Arce, Rafael & Medina, Eva, 2014. "Assessing the future of a CSP industry in Morocco," Energy Policy, Elsevier, vol. 69(C), pages 586-597.
    3. Antonio Baez, 2014. "“A panel data analysis of FDI and informal labor markets”," IREA Working Papers 201404, University of Barcelona, Research Institute of Applied Economics, revised Feb 2014.

    More about this item

    Keywords

    Foreign Direct Investment; Determinants; Institutions; Middle East North Africa countries (MENA); European Union (EU); Panel Data.;

    JEL classification:

    • 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

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