Year: 2014
Type: dissertation
Abstract: This thesis investigates empirically the determinants of Foreign Direct Investment \n(FDI) into countries of the Middle East and North Africa (MENA) region. The \nempirical analysis of this thesis conducted at three different levels, intra-regional \nlevel, country-level and firm-level. Chapter five investigates FDI determinants \nbetween MENA countries using a gravity model with fixed effects included in the \nmodel. The results indicate that traditional gravity factors play important roles in \nexplaining the level of FDI between MENA countries. The effects of geographical \ndistance, common borders and bilateral investment treaties are particularly relevant \nto FDI within the region, suggesting that bilateral FDI flows tend to be larger \nbetween neighbours, having already established bilateral investment treaties \nagreements. The results also show that FDI inflows differ between MENA \ncountries according to their economic and institutional structure. Resource-rich \ncountries on average receive less FDI compared resource-poor countries in the \nregion. Furthermore, FDI to resource-poor countries found to responds negatively \nto the availability of natural resource, and positively to the quality of institutions, \nopposite to the case of the resource-rich countries. \nChapter six investigates the determinants of FDI into MENA and developing countries. The empirical analysis of this chapter aimed to answer the question of whether determinants of FDI in developing countries affect MENA countries differently. The results indicate that a MENA country receive on average 1.21 percent less FDI than a non-MENA country, and that the natural resources have a direct negative effect on FDI to MENA countries even after controlling for the necessary factors for both MENA and developing countries. The marginal effects of return on investment, quality of infrastructure and macroeconomic instability on FDI were found to be less for a MENA country compared to a non-MENA country. The results also show that qualities of institutions in MENA countries are negatively affected by the presence of natural resource in these countries (resource curse effects). Unlike other developing countries, the interaction between natural resource and institutions in MENA region found to have adverse effect on FDI. \nChapter seven investigates the effect of FDI and business environment constraints on the performance of firms in three MENA countries, Egypt, Morocco and Turkey using firm-level data. The results indicate that foreign ownership has positive significant impact on performance of firms in the three selected MENA countries. The results also show that performance of firms in the three MENA countries hindered by the constraints of business environments in these countries. Education of labor, access to finance, electricity outages obstacles and corruption were all found to have negative effects on the growth and performance of firms. The results also indicate that performance of firms differ across countries and industries. A comparison in term of firms’ performance indicate that on average, textiles and garments firms in Egypt have less comparative advantage in their productivity per worker than firms in Turkey and Morocco.
Author: Salah M. Abumangosha
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
Funder: Bournemouth University
OpenAlex ID: W1042911151