Does the rule of law affect the relation between IHDI and FDI ? : an empirical evidence for the MENA region from 2010-2019

Abstract EN

The paper investigates the relationship between Inequality Adjusted Human Development Index (IHDI) and The Foreign Direct Investment inflows (FDI) given a set of controlled variables: GDP per Capital, Inflation Rate, Population Growth, Trade Openness, Rule of Law.

With the use of a panel data for nine (9) MENA countries for the period of (2010-2019).

The regression model used a pre-elementary examination of the variables, descriptive statistics and correlation matrix, and with the use of the Generalized method of moments (GMM).

The paper is divided into four parts: the first, the Introduction that highlights the importance of the study.

The second part that discusses the Literature review interpreting the impact of FDI on IHDI, the FDI on income inequality, and FDI on Human Development.

The Third part is reviewing the Econometric Specification and Methodology along with the empirical and the estimation results.

The Fourth part includes the main findings of the study.

The paper had found a significant positive relationship between FDI on IHDI, where a nonlinear relationship between FDI and IHDI was tested.

The paper finally figured out that the interaction between the FDI and Rule of Law has a positive impact on IHDI.