Abstract

In this paper, the catalyst factors of foreign direct investment inflows in some Middle-East and North Africa countries are examined by applying a Mixed-effect model to a dynamic panel data from 1980 to 2010. The results reveal that government capital Gross national expenditure, trade openness, inflation rate and labor force have robust result. Also a one year lagged values of foreign direct investment is found to have a positive effect on attractiveness of foreign direct investment inflows. Results show also that there is other variables that could be key factors in boosting foreign direct investment attractiveness even if they have not a direct significant effect on foreign direct investment inflows in Middle-East and North Africa. Furthermore, the in-sample selected countries express a high level divergence in terms of conditions needed to create a favorable environment to attract sustainable foreign direct investment projects.

KEYWORDS: FDI - macroeconomic aggregates - panel data - economic growth.