Impact of the investment environment on FDI flow in Arab countries : an empirical study

Abstract EN

This paper aims to study the determinants of the investment environment and its impact on the flow of foreign direct investment in the Arab region.

The study deals with the inflows of fictitious investments in global economies, and the rate of growth of foreign direct investment flows in the Arab countries.

In addition to studying the relationship between investment environment indicators and foreign direct investment flows in the Arab countries using panel data during 2002-2018.

The study concluded that the Arab countries are classified into three types according to the average growth of foreign direct investment, while the degree of sensitivity of foreign direct investment in Arab countries is affected more by the political situation and the lack of transparency of laws and accountability.

As for the econometric study, the appropriate model is the random effects model, with a long-term equilibrium relationship between the governance variables and the inflows of foreign direct investment.