Institutional Dimension of Investment Profile, Natural Resources & Foreign Direct Investments: A Case of MENA Oil Producing Countries

  •  Sahar Khayat    


The economic development of countries depends on the flow of foreign direct investment. The natural resources are responsible for maximum attraction of FDI in MENA countries. The study has aimed to examine the impact of institutional dimension of investment profile and natural resources on the flow of foreign direct investment in MENA countries. The study has included 17 MENA countries for the generation of incomplete and unbalanced panel data for the years 1960-2012. The study has considered FDI as dependent variable; while, the independent variables include location dimension, institutional dimension, new theory trade, and other economic determinants. The basic dunning OLI paradigm is combined with different variables; and the results were compared with previous studies. The flow of FDI in MENA countries is affected by different natural resources. The application of resource curse to FDI flow in MENA countries represents the negative correlation between energy endowment and FDI flow. The results showed that oils rents are not statistically significant. Moreover, investment profile and oil relative production were negatively correlated. The importance of natural resources and FDI determinants in MENA countries has been determined in the present study.

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