Foreign Direct Investment, Complementarities, and Economic | 17781
International Research Journals

Journal of Research in Economics and International Finance

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Foreign Direct Investment, Complementarities, and Economic Growth: The Case of MENA Economies


Yosra Saidi1, Amine Haouas2 and Anis Ochi

In this paper, we analyse the role played by foreign direct investment inflows in the long run economic growth of 16 economies in the MENA region, using the method of GMM estimation for dynamic panels. We find evidence that the FDI inflows and the economic growth are correlated positively but with a weak significance from 1996 to2012. This result has been obtained after controlling the following variables: trade openness, financial sector development, investment in human capital, gross domestic investment, domestic inflation rate, and the quality of governance. The finding supports some recent ideas, which state that, FDI’s contribution to increasing long run growth rates in MENA economies depends on a complementarities conditions (local conditions and policies) such as: sophisticated financial market, well developed human capital and good governance, among other local characteristics.

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