A Determinants of FDI in the Economy of GCC Countries: A PMG ARDL Approach

Abstract

The main determinant of the growth of Gulf Cooperation Council (GCC) countries is inward foreign direct investment stock (FDI). The paper shows the effects of economic growth, cost of living, Economic Freedom Indices, global oil price, and construction value-added on the inward foreign direct investment stock in GCC in the long term and short term for an unbalanced data period of study from 1996 to 2020(Bahrain, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates) and Qatar from 1999 to 2020. We use the PMG ARDL model to have a long-run and short-run estimate between these variables in the gulf council region. Empirical results evidence positive correlation that economic growth and construction industry volumes and cost of living and economic freedom indices have an inverse relationship in long term on regional FDI stock. At the same time, results confirm that there is Cross-sectional dependence among these countries of GCC.

Development and Validation of an Islamic Investor’s Sentiment Scale for Stock Market Investment

“…Riba is the name for any additional cent that is added to the principal amount of any other benefit associated with this transaction. The goals, risk-sharing arrangements, and interest-based transactions between Islamic and conventional banking are unlike (Ahmad et al, 2010; Osmanovic & Alvi, 2022). Diversification resulted in worse PRO and higher expenses, according to Berger et al’s (2010) examination of a panel data of 88 Chinese banks between 1996 and 2006.…”