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http://dx.doi.org/10.13106/jafeb.2021.vol8.no4.0069

Determinants of Foreign Direct Investment in GCC Countries: An Empirical Analysis  

AL-MATARI, Ebrahim Mohammed (Department of Accounting, College of Business, Jouf University)
MGAMMAL, Mahfoudh Hussein (Department of Accounting, College of Business, Jouf University)
SENAN, Nabil Ahmed M. (Department of Accounting, College of Business Administration, Prince Sattam bin Abdul Aziz University)
ALHEBRI, Adeeb Abdulwahab (Department of Business Administration, Community College Muhayil, King Khaled University (KKU))
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.4, 2021 , pp. 69-81 More about this Journal
Abstract
The aim of this paper is to identify the key determinants in the Gulf Cooperation Council (GCC) countries for Foreign Direct Investment (FDI) inflows by using a balanced data panel for the period from 1995 to 2018. This study covers GCC countries in their entirety. The study uses ten explanatory variables, namely, trade ratio, gross domestic product, external balance, fuel exports, gross savings, international tourism, military expenditure, net foreign assets, services value added, and total natural resources. The authors have tried to find the best fit model from the differences methods considered such as OLS, GLS regression with the help of Hausman test, and country by country regressions as additional analysis. The study revealed a significantly positive association between inflation, trade ratio, gross domestic product, gross savings, and net foreign assets with FDI. On the contrary, international tourism was revealed to have a negative association with FDI. The sample of all GCC countries chosen for this study has not been considered widely by any earlier study. Moreover, this study covered many determinants of FDI that add to the previous literature. It is a significant contribution to the current research body and stresses the originality of this paper.
Keywords
Foreign Direct Investment; FDI Inflows; GCC Economies; Panel Data Approach;
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