The Impact of Foreign Direct Investment on Economic Growth in the MENA Region

Economic growth is one of the basic objectives of countries' economic programs, which is influenced by various factors such as the amount of capital available. Attracting capital and foreign direct investment is an important way to accelerate the economy towards development and job creation, which can be considered an engine of economic growth and development. Considering the special importance of foreign direct investment (FDI) in economic growth, this article examines the impact of FDI on economic growth. For this purpose, the data of some countries in the Middle East and North Africa (Egypt, Saudi Arabia, Morocco, Jordan, Tunisia, Iran, Turkey, and Yemen) were selected for the period from 1980 to 2020. A second-generation panel cointegration method was used to achieve the study's objective. According to the results, the impact of FDI on economic growth in Egypt, Saudi Arabia, Morocco, Tunisia, Turkey, and Yemen during the study period is positive and statistically significant. In Jordan and Iran, FDI was found to have no impact on economic growth. Moreover, the impact of capital stock and labor on the economic growth of member countries is positive and significant, except in Tunisia, Egypt, Jordan, and Yemen.