Foreign Direct Investment, Institution and Economic Growth: Evidence from MENA Region

Abstract

The paper explores the relationships between Foreign Direct Investment (FDI), institution and economic growth for a group of eighteen Middle East and North African (MENA) countries. For a sample of 18 countries covering from 2006 to 2012, we identify the positive and significant roles of foreign direct investment and institutions on the economic growth of these countries. Specifically, we find transparent government, less risk in operating business, and judicial independence provides positive support to growth in presence of FDI in these countries. We derive our results using panel data analysis. Our alternative estimation techniques and methods confirm the robustness of our findings.