Daniele, Vittorio and Marani, Ugo (2006): Do institutions matter for FDI? A comparative analysis for the MENA countries.
Download (361kB) | Preview
The paper analyses the underpinning factors of foreign direct investments towards the MENA countries. Our main interpretative hypothesis is based on the significant role of the quality of institutions to attract FDI. In MENA experience the growth of FDI flows proved to be notably inferior to that recorded in the EU or in Asian economies, such as China and India. Our research, firstly, stresses three major factors for such a poor performance: i) the small size of local markets and the lack of real economic integration; ii) the changes in the scenario of international competition; iii) economic and trading reforms in the MENA have been slow and mostly insufficient. Using the Kaufmann, Kraay and Mastruzzi (2005) governance indicators, we examine the role of “institutional quality” on FDI trough a regression analysis. Our analysis show as institutions play an important role in the relative performances of countries in attracting FDI. At last, data on institutional quality and business climate show the relative disvantages of MENA. Our paper suggests as MENA countries require deep institutional reforms in order to improve the attractiveness in terms of FDI.
|Item Type:||MPRA Paper|
|Institution:||Università Magna Graecia di Catanzaro|
|Original Title:||Do institutions matter for FDI? A comparative analysis for the MENA countries|
|Keywords:||FDI; Institutions; MENA Countries|
|Subjects:||F - International Economics > F1 - Trade > F13 - Trade Policy; International Trade Organizations
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||Vittorio Daniele|
|Date Deposited:||28. Mar 2007|
|Last Modified:||13. Feb 2013 11:30|
Acemoglu D., S. Johnson, J. Robinson (2004), “The Colonial Origins of Comparative Development”, American Economic Review, 91, 5, 1369-1401. Alessandrini S. (2000), “FDI in the MENA region”, Paper prepared for the Third Mediterranean Development Forum, Cairo, 5-8 March 2000. Altomonte C., C. Gagliano (2001), Competing Locations? Market Potential and FDI in Central and Eastern Europe vs. the Mediterranean”, Katholieke Universiteit Leuven, LICOS Discussion Papers 108/2001. A.T. Kearney (2004), “FDI Confidence Index”, The Global Business Policy Council, October 2004, Vol. 7, Alexandria, Virginia. Bénassy-Quéré A., M. Coupet, T. Mayer (2005), “Institutional Determinants of Foreign Direct Investment”, CEPII, Working paper, 2005-05. Berthelier P., A. Desdoigts A., J. Ould Aoudia (2001), “Institutional Profiles. Presentation and Analysis of an Original Database of the Institutional Characteristics of Developing, in Transition and Developed Countries”, France Ministry of Economic Finance and Industry, Paris, France. Bosworth B., S. M. Collins (2003), “The Empirics of Growth: An Update”, Brooking Institutions, Working paper, September. Brink C. H. (2004), Measuring Political Risk: Risks to Foreign Investment, Aldershot, Ashgate. Busse M., J. L. Groizard (2006), “Foreign Direct Investment, Regulations and Growth”, World Bank Policy Research Working Paper 3882, April. Busse M. C. Hefeker (2005), “Political Risk, Institutions and Foreign Direct Investment”, HWWA Discussion Paper, 315. Chan K. K., E. R. Gemayel (2004), Risk Instability and the Pattern of Foreign Direct Investment in the Middle East and North Africa Region, International Monetary Fund, Working paper 04/139. Dollar D., M. Hallward-Driemeier, T. Mangistae (2002), “Investment Climate and International Integration”, World Bank Policy Research Working Paper 3323, June. Dollar D., A. Kraay (2001), “Trade, Growth and Poverty”, Finance and Development, 38, n.3, IMF, Washington D.C. Eicher T., A. Leukert (2006), “Institutions and Economic Performance: Endogeneity and Parameter Heterogeneity”, Münchener Wirtschaftswissenschaftliche Beiträge, Working paper 2006-05. European Commission (2003), “Europe and Mediterranean, Towards a Closer Partnership: An Overview of the Barcelona Process in 2002”, Brussels, the European Commission. Frankel A.J., D. Romer (1999), “Does Trade Cause Growth”, American Economic Review, 89, June, 379-99. Globerman S., D. Shapiro (2002), “National Political Infrastructure and Foreign Direct Investment”, Industry Canada, Research Publication Program, Working paper n. 37. Gwartney, J., R. Lawson (2005), “Economic Freedom of the World: 2005 Annual Report”. Vancouver: The Fraser Institute. Hall R., C. Jones (1999), “Why Do Some Countries Produces So Much More Output per Workers than Others?” Quarterly Journal of Economics, 114, 1, 83-116. Kaufman D., A. Kraay (2003), “Governance and Growth. Causality which way? Evvidence from the World, in brief”, mimeo, World Bank. Kaufman D., A. Kraay, M. Mastruzzi (2005), Governance Matters IV: Governance Indicators for 1996-2004, World Bank, May. www.worldbank.org/wbi/governance/govdata/. Nunnenkamp P. (2002), Foreign Direct Investment in Developing Countries: What Economists (Don’t) Know and What Policymakers Should (Not) Do!, Centre For International Trade, Economics & Environment (CUTS), Monographs on Investment, 11. Ragionieri R., Schmidt di Friedberg O., eds., (2003), Culture e conflitti nel Mediterraneo, Asterios, Trieste. Radwan S., Reiffers J. L. (2005), coordinators, “The Euro-Mediterranean Partnership, 10 Years After Barcelona: Achievements and Perspectives”, FEMISE Steering Committee, February. Sala-i-Martin X. E. Artadi (2002), “Economic Growth and Investment in the Arab World”, Columbia University, Discussion Papers Series, 0203-08. Sekkat K., M. A. Veganzones-Varoudakis (2004), “Trade and Foreign Exchange Liberalization, Investment Climate and FDI in the MENA Countries”, DULBEA, Université Libre de Bruxelles, Working paper n.05.06. Stern N. (2003), “Investment Climate: Lessons and Change”, The Egyptian Centre for Economic Studies, Distinguished Lecture Series, 19. UNCTAD (2005), World Investment Report 2005, NewYork and Geneve. World Bank (2006), “Doing Business in 2006: Creating Jobs”, Washington D.C. World Bank (2003a), “Jobs, Growth and Governance in the Middle East and North-Africa. Unlocking the Potential for Prosperity”, Washington D.C. World Bank (2003b), “Trade, Investment, and Development in the Middle East and North Africa. Engaging with the World”, Washington D.C.