Does Country Risk affect FDI to GCC Countries?
|
Researchers |
Dr. Sulaiman Mouselli, Dr. Hazem Al-Samman |
|
Published in |
Pertanika Journal of Social Sciences & Humanities (JSSH), Vol. 26, No. 4, pp. 2627 - 2642, December 2018 |
|
Abstract |
This paper examines the long-and short-term impacts of country risk on FDI using co-integration and error correction models in GCC countries for the period from 2002 to 2015. We use three proxies for country risk: corruption, regulatory quality and political stability and absence of violence. The evidence suggests a positive long-term impact of fighting corruption and improving quality of regulations on the attractiveness of host countries to FDI. Surprisingly, political stability and absence of violence variable negatively affects FDI. The results of our study suggest that policy makers could attract more FDI to GCC countries through directing efforts towards raising the quality of regulations and institutions (in this case, in order to compact corruption) which may help GCC economies attract more FDI. Key words: Country risk, Corruption, FDI, Political Stability, Regulatory Quality. |
|
Link to read full paper |
