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Institutional Interaction and FDI Dynamics in the Growth of MENA Economies: Application to Dynamic Panel Data

Author

Listed:
  • Wiem El Abed

    (USO - جامعة سوسة = Université de Sousse = University of Sousse)

  • Mongi Lassoued

    (USO - جامعة سوسة = Université de Sousse = University of Sousse)

Abstract

This study analyzes the interaction between institutional quality and FDI dynamics in driving economic growth across 16 MENA countries over the period 2011-2024. Using the Generalized Method of Moments (GMM) developed by Arellano and Bond (1991), it addresses the endogeneity between growth, FDI, and institutional factors. The results suggest that FDI positively contributes to growth, but its impact largely depends on the quality of institutions. Countries with strong governance and sound regulatory frameworks benefit more from technology transfer and productivity spillovers generated by FDI. The study therefore highlights that institutional improvement is a key lever for maximizing the benefits of foreign investment and fostering sustainable growth in the MENA region.

Suggested Citation

  • Wiem El Abed & Mongi Lassoued, 2026. "Institutional Interaction and FDI Dynamics in the Growth of MENA Economies: Application to Dynamic Panel Data," Post-Print hal-05491999, HAL.
    • Handle: RePEc:hal:journl:hal-05491999
    DOI: 10.55284/w5c8hx40
    Note: View the original document on HAL open archive server: https://hal.science/hal-05491999v1
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    References listed on IDEAS

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    4. Ali Muhammad & Abiodun Egbetokun & Manzoor Hussain Memon, 2015. "Human Capital and Economic Growth: The Role of Governance," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 529-549.
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