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Institutions, Foreign Direct Investment, and Economic Growth in North African Countries

Author

Listed:
  • Mhamed ali Khemakhem

    () (Higher Institute of Business Administration of Sfax)

  • zouheir abida

    () (Faculty of Economics and Management of Sfax)

Abstract

This contribution investigates the causal interactions between foreign direct investment (FDI), economic freedom and economic growth in a panel of 4 countries of North Africa (Tunisia, Morocco, Algeria and Egypt) over the period 1980 - 2012. Using System Generalized Method of Moment (GMM) panel data analysis, we find strong evidence of a positive link between FDI and economic growth. We also find evidence that economic freedom appear to be working as a complement to FDI and, moreover, that the effect of FDI is more pronounced in the presence of the economic freedom variable. This means the countries promote greater freedom of economic activities gain significantly from the presence of multinational corporations (MNCs).

Suggested Citation

  • Mhamed ali Khemakhem & zouheir abida, 2016. "Institutions, Foreign Direct Investment, and Economic Growth in North African Countries," Proceedings of Business and Management Conferences 3405669, International Institute of Social and Economic Sciences.
  • Handle: RePEc:sek:ibmpro:3405669
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Foreign direct investment; Economic freedom; Economic growth;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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