Testing The FDI Hypothesis Of Location Advantage In The Case Of Kuwait

Al-Shammari, Nayef; Al-Halaq, Said; Al-Shammari, Dhuha

doi:10.19030/jabr.v32i2.9598

Cited by 7 publications

(8 citation statements)

References 14 publications

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“…For example, Akhtar, Khan, and Hussain (2013) conclude that resource-seeking FDI in Saudi Arabia is determined by trade openness. In the same context, Al-Shammari, Al-Halaq, and Al-Shammari (2016) find that openness is cointegrated with the FDI inflows in Kuwait. Aziz and Mishra (2016), who investigated the determinants of FDI inflows in 16 Arab countries (including the GCC countries) from the period 1984 to 2012, confirm these results.…”

Section: Literature Reviewmentioning

confidence: 92%

“…Akhtar, Khan, and Hussain (2013) conclude that resource-seeking FDI in Saudi Arabia is determined by trade openness, fiscal health and the presence of greater oil reserves. Al-Shammari et al (2016) find that market size, economic development, financial deepening, population increases, infrastructure development, openness and oil rent are cointegrated with the FDI inflows in Kuwait. These results are confirmed by Aziz and Mishra (2016), who investigated the determinants of FDI inflows in 16 Arab countries (including the GCC countries) in the 1984–2012 period.…”

Section: Literature Reviewmentioning

confidence: 99%

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Foreign Direct Investment Determinants in Oil Exporting Countries: Revisiting the Role of Natural Resources

Eissa

Elgammal

2019

Journal of Emerging Market Finance

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This article explores the determinants of foreign direct investment (FDI) in oil-dependent economies and revisits the role of natural resources in attracting FDI to countries of this kind. Panel data from the six Gulf Cooperation Council (GCC) countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, have been employed, covering the period from 1990 to 2015. First, we investigate the FDI determinants during the entire sample period, and then run another investigation starting from the beginning of 2000, when the FDI in the GCC region increased substantially. The results show that there is a positive nexus between market growth, trade openness, inflation, infrastructure, oil price and FDI. Interestingly, oil reserves have a negative impact on FDI; this may be because countries with large reserves of oil like the GCC countries have enough financial resources to finance their economic development. This leads these governments to set up restrictions to protect their resources, thus reducing the amount of resource-seeking FDI. JEL Codes: E22, F21, F23, F43, O13

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Section: Literature Reviewmentioning

confidence: 92%

Section: Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment Determinants in Oil Exporting Countries: Revisiting the Role of Natural Resources

Eissa

Elgammal

2019

Journal of Emerging Market Finance

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“…They contrast and demonstrate the inverted impact of FDI inflows (as % of GDP) on domestic investments by businesses and other investors. The case of "Shocking FDI -2" left-hand graph in the middle of the combined graphs illustrates the impact on investment of negative shocks, or decline in FDI, as also expected by Al-Shammari, N and Halaq, S. (2016). Conversely, the FDI shock in the middle graph which is positioned in the center of the page, titled "Increasing FDI inflows to GDP by + 2" assumes declines in FDI by 2 percentage log scale -value points.…”

Section: Dynamic Scenario Simulations Findingsmentioning

confidence: 70%

Investment and Sustainable Economic Growth: Empirical Perspective on Kuwait’s Dual Challenge During the Covid-19 Pandemic and Beyond

Al-Jabsheh¹,

Al-Qudsi²,

Hajeeh

2021

IJEFI

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Endogenous economic growth theories have pointed to private investment as one of the determinants of long run, sustainable economic growth; a well-studied relationship in the development economics literature, both theoretically and empirically. One of the main reasons the Kuwaiti economy has not achieved its aspired degree of economic diversification over decades, is the relatively low level of private investment, which has eventuated in a relatively small private sector, partly due to an unimproved investment ecosystem. Like other economies, investment in Kuwait is a robust growth driver especially as a policy tool to achieve a digital, knowledge-based economy that leapfrogs on innovative technological investments, as ambitiously strategized by the Kuwait Vision 2035. The eruption of the coronavirus pandemic and the deep recession it triggered is likely to become a major hurdle in the way of spurring sufficient quality investments. With contracted GDP and collapsed oil prices, export and fiscal revenues shrink substantially, reducing investment activity and hence negatively affecting investment. This paper focuses on the role of private investment as a function of sustainable economic growth. Specifically, this paper aims to delineate the relationship between investment and economic growth in Kuwait by outlining; the determinants and impediments of investment, investment trends and behavior, innovative models of investment in Kuwait and applying a set of seven simulation-based scenarios of investment modelled as autoregressive distributed lags. By so doing, the paper elucidates the impact of critical variables including; non-oil GDP growth, interest rates management, attracting and fostering FDI inflows, as well as the recession plagued fiscal and trade balances, in order to estimate the magnitude and time-path of key policy variables on investment. The findings illustrate the rigidity of investment when recession drags GDP, FDI, exports and trade balances as well as fiscal revenues.

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“…The majority of reviewed articles using the OLI paradigm as a theoretical framework examine the impact of both macroeconomic and institutional country-specific factors (e.g. market size, openness, institutional and infrastructure quality) on FDI inflows to MENA countries (Al-Shammari et al, 2016;Aziz and Mishra, 2016;Erdal and Tatoglu, 2002;Mina, 2007;Mohamed and Sidiropoulos, 2010;Okafor et al, 2017;Roberts and Almahmood, 2009;Rogmans and Ebbers, 2013).…”

Section: Oli Paradigm and Internalization Theorymentioning

confidence: 99%

“…It is generally considered that "good infrastructure increases the productivity of investments and therefore stimulates FDI flows" (Asiedu, 2002, p. 111). In the context of the MENA region, the majority of the studies (Al-Shammari et al, 2016;Bouabdi, 2015;Burger et al, 2016;Erdal and Tatoglu, 2002;Mina, 2007;Okafor et al, 2017;Rogmans, 2013;Sekkat and Véganzones-Varoudakis, 2007;Siddiqui and Iqbal, 2018) find a significant and positive relationship between infrastructure and FDI, while only a few studies (Kobeissi, 2005;Mohamed and Sidiropoulos, 2010;Onyeiwu, 2003;Salem and Baum, 2016) report no impact.…”

Section: Infrastructure Qualitymentioning

confidence: 99%

Country-specific determinants of FDI inflows to the MENA region

Dimitrova

Rogmans

Triki

2019

MBR

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Purpose This paper aims to synthesize, analyze and categorize the empirical literature on country-specific factors that affect foreign direct investment (FDI) inflows to the Middle East and North Africa (MENA) region. Identifying gaps and methodological challenges in the reviewed articles, recommendations are made to guide future research. Design/methodology/approach Applying the systematic review methodology, content analysis is conducted of 42 relevant empirical studies that explore country-specific FDI determinants in the MENA region during the period 1998–2018. Findings This review study identifies four main research gaps in the extant literature: a lack of consensus on a common definition of the MENA region and a weak understanding of the specificities of its investment environment; a limited set of FDI theories used and a lack of other theoretical perspectives; a recurrent focus on the direct relationship between host country–specific determinants and FDI, thus ignoring the moderating and mediating effects of some variables; and the absence of certain country-specific factors pertaining to the MENA countries. Originality/value This study contributes to the international business field by enhancing our understanding of the FDI determinants in emerging and developing markets, especially the MENA countries. It develops a typology of FDI country-specific factors in the MENA region based on four main categories: macroeconomic and financial, institutional and regulatory, natural resource endowment and socio-cultural. Paths for future research are suggested.

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Testing The FDI Hypothesis Of Location Advantage In The Case Of Kuwait

Cited by 7 publications

References 14 publications

Foreign Direct Investment Determinants in Oil Exporting Countries: Revisiting the Role of Natural Resources

Foreign Direct Investment Determinants in Oil Exporting Countries: Revisiting the Role of Natural Resources

Investment and Sustainable Economic Growth: Empirical Perspective on Kuwait’s Dual Challenge During the Covid-19 Pandemic and Beyond

Country-specific determinants of FDI inflows to the MENA region

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