Determinants of foreign direct investment in Arab countries during 1970–2016

Abstract

The aim of this study is to determine factors that attracted foreign direct investment to the Arab countries during the period of 1970–2016. Previous studies have shown that there are determinants attracting foreign direct investment to polarized countries, for which such investments are very important and have positive effects. Therefore, we studied and measured such determinants in Arab countries that are in dire need of investment. We found that foreign direct investment is positively affected by crude domestic output, economic openness, and value of foreign direct investment for the past year (t-1). However, they are negatively affected by inflation rates in the previous four years (t-4).