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FDI inflows and economic growth in Arab region: The institutional quality channel

Year: 2020

Type: article

Abstract: This study empirically investigates the possible role of institutional quality in absorbing foreign direct investment (FDI) flows' spillovers for growth in a group of Arab countries. The analysis is performed by employing system GMM estimation in panel data comprising 11 Arab countries over the period 1988–2012. It develops overall indexes of doing business and economic freedom indicators using the principal components analysis (PCA) as weights. The study finds that the quality of institutions plays an important role in enhancing economic growth via indirect impact by absorbing spillovers of FDI inflows. On the one hand, the study reveals that greater macroeconomic stability and financial development have a positive influence on growth. The results of this study have several implications for policy makers.

Source: International Journal of Finance & Economics

DOI: 10.1002/ijfe.2197

Author: Omar G. Aziz

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Peace, justice, and strong institutions

Open Access status: green

OpenAlex ID: W3052145490

FWCI: 4.269

Cites: 67

Cited by: 40

Related to: 10