The investment climate and the attractiveness of foreign direct investment in Algeria : empirical study for the period 2000-2019

Abstract EN

This study aims to analyze the relationship between the investment climate and foreign direct investment in Algeria by estimate the relationship between the FDI (as a dependent variable) and other three variables: GDP (per capita), Openness index and Political stability (as independent variables) by using a Half-logarithmic model for the period (2000-2019).

The results of the study showed that there is a positive effect of the Gross domestic product per capita on the Foreign Direct investment, a strong positive effect of openness index on the FDI has been confirmed, technically (a change increase or decrease) by one unit of the Openness Index of the Algerian Economic, ceteris paribus, should make a change of the FDI by 2.

55%.

We confirmed the existence of the causality (in Granger sense) of political stability to the FDI during the study period.