Institutional Determinants Of Foreign Direct Investment In MENA Region: Panel Co-Integration Analysis

Abstract

This study examines the impact of institutional Determinants of Foreign Direct Investment (FDI) inflows in MENA (Middle East and North Africa) region during the period 1984-2011. Using panel data techniques by considering two hypotheses of economic interdependencies and structural changes, it is found that the macro determinants like openness, growth rate, exchange rate, and economic instability, and institutional indicators like government stability, investment profile, rule of law, internal and external conflict, have a long-run effect on attracting FDI inflows.