An Analytical Study of Foreign Direct Investment in the Gulf Cooperation Council (GCC)

• Authors: Khamees Abdulqadir Salim Mohammed

Abstracts

EN

The aim of this paper is to identify the key determinants in the Gulf Cooperation Council (which will be referred as GCC) for Foreign Direct Investment (FDI) inflows. Using the understandings of financial econometrics, the study discusses a significant positive association between FDI in Non-oil industries, while on the contrary, the negative association with the Oil industries. Natural resources are a path for some countries to attract FDI but it does not achieve the main benefits of FDI, which is introduction of new technology and offering job opportunities. Existing literature argues the suggestion that resource-rich countries attract less FDI because of resource (oil) price volatility. Statistical Models in Economic are used to analyze the data in achieving the conclusion. This study examines that natural resources discourage FDI in GCC countries, and helps identify policy reform priorities to support diversification and growth in the GCC through foreign investment.

Keywords

EN

FDI; GCC; Natural resources; oil industries; GDP; trade

• Publisher: Wydawnictwo Adam Marszałek
• Journal: African Journal of Economics, Politics and Social Studies
• Year: 2023
• Volume: 2(1)
• Pages: 97-105

Dates

published

2023

Contributors

author

Khamees Abdulqadir Salim Mohammed

• University of Wrocław

• https://orcid.org/0009000572206539

References

• Baltabaev, B. (2006). Diversifying GCC economies through non-oil exports. IMF Working paper.
• Baxter, M., & Kouparitsas, M. (2006). What determines bilateral trade flows? NBER Working Paper.
• Bengoa, M., & Sanchez-Robles, B. (2003). Foreign direct investment, economic freedom and growth: New evidence from Latin America. European Journal of Political Economy, 19(3).
• Buckley, P. (n.d.). Outward Foreign Direct Investment by Emerging Market Multinationals: The Directionality of Institutional Distance. University of Leeds.
• Cerdeiro, A., & Komaromi, A. (2017). Trade and Income in the Long Run: Are There Really Gains, and Are They Widely Shared? IMF Working Paper, 17/231.
• Ding, X., & Hadzi-Vaskov, M. (2017). Composition of Trade in Latin America and the Caribbean. IMF Working Paper, 17/42.
• Feyrer, J. (2009). Trade and Income-Exploiting Time Series in Geography. NBER Working Paper.
• Foreign Direct Investment Definition from Financial Times Lexicon. Retrieved from lexicon.ft.com.
• Hausmann, R., Hwang, J., & Rodrik, D. (2007). What you export matters. Journal of Economic Growth, Springer, 12(1), pp. 1–25.
• Head, K., Mayer, T., & Ries, J. (2010). The erosion of colonial trade linkages after independence. Journal of International Economics, 81(1), pp. 1–14.
• Henn, C., Papageorgiou, C., & Spatafora, N. (2013). Export Quality in Developing Countries. IMF Working Paper, WP/13/108.
• Mayer, T., & Zignago, S. (2011). Notes on CEPII’s distance measures: The GeoDist database. CEPII Working Paper, 25. CEPII.
• OECD (2013). State-Owned Enterprises in the Middle East and North Africa. Organization for Economic Co-operation and Development.
• OECD (2002). Foreign Direct Investment for Development: Maximizing Benefits, Minimizing Costs. Organization for Economic Co-operation and Development.
• Casoria, M. (2017). Competition Law in the GCC Countries: The Tale of a Blurry Enforcement. Chinese Business Review, 16(3), pp. 141–149.
• Frankel, J. A., & Romer, D. H. (1999). Does Trade Cause Growth? American Economic Review, 89.
• S&P Global Market Intelligence (2017). Lagging Corporate Governance Still The Achilles’ Heel Of Gulf Companies. S&P Global.
• Finger, J. M., & Kreinin, M. E. (1979). Measure of Export Similarity and Its Possible Uses. The Economic.
• World Economic Forum (2013). Foreign Direct Investment as a Key Driver for Trade, Growth and Prosperity: The Case for a Multilateral Agreement on Investment.
• Daudpota, F. (2015). Competition law in the Kingdom of Saudi Arabia. Riyadh, KSA: Kindle Edition.
• Santos Silva, M. C., & Tenreyro, S. (2006). The Log of Gravity. The Review of Economics and Statistics, 88(4), pp. 641–658.
• Beaton, K., Cebotari, A., & Komaromi, A. (2017). Revisiting the Link between Trade, Growth and Inequality; Lessons for Latin America and the Caribbean. IMF Working Papers, 17/46.
• Canton, E., & Solera, I. (2016). Greenfield Foreign Direct Investment and Structural Reforms in Europe: What Factors Determine Investments? European Commission Discussion Paper, 033.
• Cherif R., Hasanov, F., & Wang, L. (2018). Sharp Instrument: A Stab at Identifying the Causes of Economic Growth. IMF Working Papers, 18/117.
• European Union (2017). Gulf cooperation Council Investment Report (Euro-support Consortium).
• Heuser, C., & Aaditya, M. (2017). Services Trade and Global Value Chains (June 27, 2017). World Bank Policy Research Working Paper, 8126.
• International Monetary Fund (2018). Opportunity for All: Promoting Growth and Inclusiveness in the Middle East and North Africa.
• Making Trade an Engine of Growth for All: The Case for Trade and for Policies to Facilitate Adjustment (2017). IMF Policy Paper, April.
• IMF (2017b). Leveraging Trade to Boost Growth in the MENAP and the CCA regions. Regional Economic Outlook: Middle East and Central Asia, Chapter 4, Washington, DC.
• IMF (2017c). Kuwait: Article IV Consultation Staff Report. IMF (2017d). Saudi Arabia: Article IV Consultation Staff Report.
• IMF (2017e). Fiscal Adjustment in the GCC: Towards a Growth-Enhancing-Expenditure-Based Adjustment.
• Rahman, J., Stepanyan, A., Yang, J., & Zeng, L. (2015). Exports in a Tariff-Free Environment: What Structural Reforms Matter? Evidence from the European Union Single Market. IMF Working Paper, WP/15/187.
• The World Bank (2013). Investing in Turbulent Times. World Bank Middle East and North Africa Economic Developments and Prospects.
• Trade and Foreign Investment – Keys to Diversification and Growth in the GCC Prepared by Staff of the International Monetary Fund.
• Walsh, J. P., & Yu Jiangyan (2010). Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach. IMF Working Paper, WP/10/187, July.

Identifiers

DOI

10.15804/ajepss.2023.1.07

Biblioteka Nauki

18768973