Advances and Applications in Statistics
Volume 28, Issue 1, Pages 55 - 75
(May 2012)
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DETERMINANTS OF FOREIGN DIRECT INVESTMENT INFLOWS OF GULF COOPERATION COUNCIL:
PANEL GRAVITY MODEL APPROACH
Ahmed H. Youssef and Nada Ali-Mohammed Muqaibal
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Abstract: Gravity model of inward foreign direct investment (FDI) is specified for the determinants of FDI inflows across gulf cooperation council (GCC) regions during 28 years. FDI inflows in panel gravity model several additional variables such as gross domestic production (GDP), per capita of GDP (PEGDP), exchange rate (ER), oil production (OILP), gas natural production (GNP), bank credit (BC), population (POP), geographical distance (GD), openness, main paved roads (MPR), area of cultivable land (ALC), production of cement (PC), dummy variables for the second war gulf (CRISI) and World Trade Organization (GULF). Our data set consists of FDI inflows from six sources and home countries (KSA, UAE, Oman, Bahrain, Kuwait and Qatar) from 1981-2008. Our studies have analyzed the bilateral FDI inflows patterns of the GCC countries both among member states. For the empirical analysis, a gravity model has been employed in order to model bilateral FDI inflows among the GCC countries in the context of the single country approach. Our results of the stepwise method for estimations have been used to comment on the bilateral FDI inflows patterns of the GCC countries. From our study, we reached several results like a weakness in the proportion of the gulf of investment inflows of foreign direct interfaces through the correlation coefficients in the models of gravity standard. BC variable of the most influential determinants of FDI inflows to the intra-GCC countries followed by average PEGDP MPR. From our study, we also noted a rise in the investment sector at natural gas the expense of OILP, which means the attention of the gulf of diversified sources of energy in recent years. |
Keywords and phrases: FDI, GCC, panel data, gravity model, stepwise regressions. |
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