IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-05491999.html

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
    as

    Download full text from publisher

    File URL: https://hal.science/hal-05491999v1/document
    Download Restriction: no
    File URL: https://libkey.io/10.55284/w5c8hx40?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    2. Philippe Aghion & Peter Howitt & David Mayer-Foulkes, 2005. "The Effect of Financial Development on Convergence: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 173-222.
    3. Elisa Valeriani & Sara Peluso, 2011. "The Impact Of Institutional Quality On Economic Growth And Development: An Empirical Study," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 1(6), pages 1-25, October.
    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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grier, Kevin & Grier, Robin, 2007. "Only income diverges: A neoclassical anomaly," Journal of Development Economics, Elsevier, vol. 84(1), pages 25-45, September.
    2. W. Bentley MacLeod, 2006. "Reputations, Relationships and the Enforcement of Incomplete Contracts," CESifo Working Paper Series 1730, CESifo.
    3. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624, December.
    4. Mehraj Ahmad Sheikh & Mushtaq Ahmad Malik, 2021. "The Nexus of Trade Openness, Institutions and Economic Growth: An Empirical Investigation of BRICS Countries," Foreign Trade Review, , vol. 56(2), pages 206-215, May.
    5. Chinmaya Behera & Bikash Ranjan Mishra & Biswashree Tanaya Priyadarsini & Lopamudra D. Satpathy, 2020. "Institutional Quality and Foreign Direct Investment Inflows: Evidence from Cross-country Data with Policy Implication," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 302-316.
    6. Mohammad Sharif Karimi & Elham Heshmati Daiari, 2018. "Does Institutions Matter for Economic Development? Evidence for ASEAN Selected Countries," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(1), pages 1-20, Winter.
    7. Frederic S. Mishkin, 2007. "Is Financial Globalization Beneficial?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(2-3), pages 259-294, March.
    8. Zergawu, Yitagesu Zewdu & Walle, Yabibal M. & Giménez-Gómez, José-Manuel, 2020. "The joint impact of infrastructure and institutions on economic growth," Journal of Institutional Economics, Cambridge University Press, vol. 16(4), pages 481-502, August.
    9. Serkan Degirmenci, 2011. "Do Institutions Matter for Regional Economic Growth and Development? The Case of Turkey," ERSA conference papers ersa11p1180, European Regional Science Association.
    10. Kim, Dong-Hyeon & Lin, Shu-Chin & Suen, Yu-Bo, 2016. "Trade, growth and growth volatility: New panel evidence," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 384-399.
    11. Levy Yeyati, Eduardo & Sturzenegger, Federico, 2010. "Monetary and Exchange Rate Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4215-4281, Elsevier.
    12. Casey, Gregory & Klemp, Marc, 2021. "Historical instruments and contemporary endogenous regressors," Journal of Development Economics, Elsevier, vol. 149(C).
    13. Sidra Munir & Zia-ur-Rehman Rao & S Sana, 2019. "Financial Development, Fiscal Policy and Economic Growth: The Role of Institutional Quality in Pakistan," Journal of Finance and Accounting Research, University of Management and Technology, Lahore, vol. 1(2), pages 27-47, August.
    14. Glawe, Linda & Wagner, Helmut, 2022. "Is schooling the same as learning? – The impact of the learning-adjusted years of schooling on growth in a dynamic panel data framework," World Development, Elsevier, vol. 151(C).
    15. Dearmon, Jacob & Grier, Kevin, 2009. "Trust and development," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 210-220, August.
    16. Aribah Aslam, 2020. "The hotly debate of human capital and economic growth: why institutions may matter?," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(4), pages 1351-1362, August.
    17. Rohini Pande & Christopher Udry, 2005. "Institutions and Development:A View from Below," Working Papers 928, Economic Growth Center, Yale University.
    18. Salaheddine SARI-HASSOUN & Abderrahim CHIBI & Sidi Mohamed CHEKOURI, 2024. "Institutional quality and sustainability: empirical study in 11 MENA countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(641), W), pages 129-152, Winter.
    19. Óscar Afonso, 2026. "How monetary policy and institutions shape R&D: a dynamic general equilibrium approach," Economic Change and Restructuring, Springer, vol. 59(1), pages 1-28, February.
    20. Zaiter Lahimer, Mahjouba, 2011. "L’impact des entrées de capitaux privés sur la croissance économique dans les pays en développement," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/7670 edited by Sterdyniak, Henri.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-05491999. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.