The Contagion Disease that affects Foreign direct investment In the MENA countries
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Published
Sep 1, 2007
Abstract
This paper aims to analyze the dynamic relationship between foreign direct investmer and different kinds of risks in the MENA countries, using the vector autoregressive tec\ on the country level for 11 MENA countries during the period 1980-2003. Despite th that, the macroeconomic performance and the political (in) stability are important in determining the location of FDI, the findings indicate that the cultural environn, also having its special effects on this theme. These results should attract the attent policymakers; since the results reveal that: it is neither the economical risk nor the po risk that mostly perform threats and shy away FDI from the MENA countries (as u point to), but it is a contagion disease that is called the cultural risk.
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Keywords
Investement
References
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• Adler, N (1980b). Domestic Multiculturalism: Cross-Cultural Management in Public Sector. In Eddy, E (Ed.) Handbook of Organizational Management, Marcel Dekker, New York, NY, (PP. 482-499).
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• Apergis, N. and Katrakildis, C (1998), “Does Inflation Uncertainty Matter in Foreign Direct Investment Decisions? An empirical Investigation for Portugal, Spain and Greece,” Rivista Internazionale Di Scienze Economiche E Commerciali, Vol.45. PP. 729-744.
• Chan, K. and Gemayel, E (2004), “Risk Instability and the Pattern of FDI in the Middle East and North Africa Region,” IMF working paper no. WP/04/139, International Monetary Fund, Washington, D.C.
• Development Financing, Several Issues.
• Eid, F. and Paua, F (2003), “FDI in the Arab World: The Changing Investment Landscape,” Arab World Competitive Report, PP. 108-119.
• Erlich, I. and Lui, F (1999), “Bureaucratic Corruption and Endogenous Economic Growth,” Journal of Political Economy, Vol.107. No.6. PP.S270–S293, (Part 2: Symposium).
• Froot, K. and Stein, J (1991), “Exchange Rates and FDI: An Imperfect Capital Markets Approach,” Quarterly Journal of Economics, Vol.106. PP. 1191-1217.
• Galan, J. and Benito, J (2001), “Determinant Factors of Foreign Direct Investment: Some Empirical Evidence,” European Business Review, Vol.13. No.5. PP. 269-278.
• Gao, T (2005), “Foreign Direct Investment in China: How Big are the Roles of Cultural and Geography?,” Pacific Economic Review,Vol.10.No.2.PP.153-166.
• Garibaldi, P. Mora, N. Sahay, R. and Zettelmeyer, J (2002), “What Moves Capital to Transition Economies,” IMF working paper no. 02/64, International Monetary Fund, Washington, D.C.
• Hanson, J (1999), “Cultural Shock and Direct Investment in Poor Countries,” Journal of Economic History, Vol.59. No.1. PP. 1-16.
• Hawkins, P. and Lockwood, K (2001), “A Strategy for Attracting Foreign Direct Investment,” Paper presented at the Economic Society of South Africaʼs Binnal Conference, Glenburn Lodge, September 2001.
• Hofstede, G (1997), Cultures and Organizations: Software of the Mind. New York: McCraw-Hill.
• Iqbal, Z (2001), Economic Challenges in the Middle East and North Africa: An Overview. In Iqbal, Z. (Ed.) Macroeconomic Issues and Policies in the Middle East and North Africa, Washington: International Monetary Fund.
• Janeba, E (2002), “Attracting FDI in a Politically Risky World,” International Economic Review, Vol.43. No.4. PP. 1127-1155.
• Kamar, B. and Bakardzhieve, D (2002), “The Reforms to Attract more FDI in Egypt: Lessons from the CEEC Experience,” Paper presented at the Economic Research Forum for Arab Countries, Turkey and Iran, October 2002.
• Karam, P (2001), “Exchange Rate Policies in Arab Countries: Assessment and Recommendations,” Arab Monetary Fund AMF, Abu Dhabi.
• Kostova, T. and Zaheer, S (1999), “Organizational Legitimacy under Conditions of Complexity: The Case of the Multinational Enterprise,” Academy of Management Review, Vo.24. No.1. PP. 64–81.
• Lipsey, R (2001), “Foreign Direct Investment in Three Financial Crises,” NBER working paper no. 8084, National Bureau of Economic Research: Cambridge: Mass.
• Lucas, R. E (1990), “Why Doesnʼt Capital Flow from Rich to Poor Countries?,” American Economic Review, Vo.80. No.2. PP. 92-96.
• Makki, S. and Somwaru, A (2004), “Impact of Foreign Direct Investment and Trade on Economic Growth: Evidence from Developing Countries,” American Agricultural Economics Association, Vo.86. No.3. PP. 795-801.
• Mellahi, K. Guermat, C. Frynas, G. and AL- Bortamani, H (2003), “Motives for Foreign Direct Investment in Oman,” Thunderbird International Business Review, Vol.45. No.4. PP. 431-446.
• Miroshnik, V (2002), “Culture and International Management: A Review,” Journal of Management Development, Vol.21. No.7. PP. 521-544.
• Mmieh, F. and Frimpong, N (2004), “State Policies and the Challenges in Attracting FDI: A Review of the Ghana Experience,” Thunderbird of International Business Review, Vol.46. No.5. PP. 575-599.
• Ngowi, H. P (2001), “Can Africa Increase its Global Share of Foreign Direct Investment?,” West African Review, Vol.2. No.2. PP. 1-22.
• Onyeiwu, S (2000), “Foreign Direct Investment, Capital Out flows and Economic Development in the Arab World,” Journal of Development and Economic Policies, Vol.2. No.2. PP. 27-57.
• Onyeiwu, S (2003), “Analysis of FDI Flows to DCs, is the MENA Region Different?,” Paper presented at the Economic Research Forum, ERF 2003.
• Pan, Y. and Chi, P (1999), “Financial Performance and Survival of Multinational Corporations in China,” Strategic Management Journal, Vol.20. PP. 359-374.
• Robertson, C. and Watson, A (2004), “Corruption and Change: The Impact of Foreign Direct Investment,” Strategic Management Journal, Vol.25. No.4. PP. 385-396.
• Sadik, A. and Bolbol, A (2001), “Mobilizing International Capital for Arabic Economic Development: With Special Reference to the Role of FDI,” Arab Economic Journal, Vol.10. No.26. PP. 3–49.
• Sadik, A. and Bolbol, A (2003), “Attracting Foreign Direct Investment to the Arab Countries: Facts and Factors,” Mimeo, Arab Monetary Fund, Abu Dhabi.
• UNCTAD (2002), “Trade and Development Abroad,” World Investment Report: United Nations, New York and Geneva.
• UNDP (2002), “Arab Human Development Report”.
• World Bank, Global Development Finance: Country Tables, Several Issues.
• Adler, N (1980b). Domestic Multiculturalism: Cross-Cultural Management in Public Sector. In Eddy, E (Ed.) Handbook of Organizational Management, Marcel Dekker, New York, NY, (PP. 482-499).
• Alessandrini, S. (2000), “FDI in the MENA Region,” Paper presented at the third Mediterranean Development Forum, Cairo, March 2000.
• Ana, M (1997), “Foreign Direct Investment Flows to Low Income Countries: A Review of the Evidence,” Overseas Development Institute, ISSN: 0140-8682.
• Apergis, N. and Katrakildis, C (1998), “Does Inflation Uncertainty Matter in Foreign Direct Investment Decisions? An empirical Investigation for Portugal, Spain and Greece,” Rivista Internazionale Di Scienze Economiche E Commerciali, Vol.45. PP. 729-744.
• Chan, K. and Gemayel, E (2004), “Risk Instability and the Pattern of FDI in the Middle East and North Africa Region,” IMF working paper no. WP/04/139, International Monetary Fund, Washington, D.C.
• Development Financing, Several Issues.
• Eid, F. and Paua, F (2003), “FDI in the Arab World: The Changing Investment Landscape,” Arab World Competitive Report, PP. 108-119.
• Erlich, I. and Lui, F (1999), “Bureaucratic Corruption and Endogenous Economic Growth,” Journal of Political Economy, Vol.107. No.6. PP.S270–S293, (Part 2: Symposium).
• Froot, K. and Stein, J (1991), “Exchange Rates and FDI: An Imperfect Capital Markets Approach,” Quarterly Journal of Economics, Vol.106. PP. 1191-1217.
• Galan, J. and Benito, J (2001), “Determinant Factors of Foreign Direct Investment: Some Empirical Evidence,” European Business Review, Vol.13. No.5. PP. 269-278.
• Gao, T (2005), “Foreign Direct Investment in China: How Big are the Roles of Cultural and Geography?,” Pacific Economic Review,Vol.10.No.2.PP.153-166.
• Garibaldi, P. Mora, N. Sahay, R. and Zettelmeyer, J (2002), “What Moves Capital to Transition Economies,” IMF working paper no. 02/64, International Monetary Fund, Washington, D.C.
• Hanson, J (1999), “Cultural Shock and Direct Investment in Poor Countries,” Journal of Economic History, Vol.59. No.1. PP. 1-16.
• Hawkins, P. and Lockwood, K (2001), “A Strategy for Attracting Foreign Direct Investment,” Paper presented at the Economic Society of South Africaʼs Binnal Conference, Glenburn Lodge, September 2001.
• Hofstede, G (1997), Cultures and Organizations: Software of the Mind. New York: McCraw-Hill.
• Iqbal, Z (2001), Economic Challenges in the Middle East and North Africa: An Overview. In Iqbal, Z. (Ed.) Macroeconomic Issues and Policies in the Middle East and North Africa, Washington: International Monetary Fund.
• Janeba, E (2002), “Attracting FDI in a Politically Risky World,” International Economic Review, Vol.43. No.4. PP. 1127-1155.
• Kamar, B. and Bakardzhieve, D (2002), “The Reforms to Attract more FDI in Egypt: Lessons from the CEEC Experience,” Paper presented at the Economic Research Forum for Arab Countries, Turkey and Iran, October 2002.
• Karam, P (2001), “Exchange Rate Policies in Arab Countries: Assessment and Recommendations,” Arab Monetary Fund AMF, Abu Dhabi.
• Kostova, T. and Zaheer, S (1999), “Organizational Legitimacy under Conditions of Complexity: The Case of the Multinational Enterprise,” Academy of Management Review, Vo.24. No.1. PP. 64–81.
• Lipsey, R (2001), “Foreign Direct Investment in Three Financial Crises,” NBER working paper no. 8084, National Bureau of Economic Research: Cambridge: Mass.
• Lucas, R. E (1990), “Why Doesnʼt Capital Flow from Rich to Poor Countries?,” American Economic Review, Vo.80. No.2. PP. 92-96.
• Makki, S. and Somwaru, A (2004), “Impact of Foreign Direct Investment and Trade on Economic Growth: Evidence from Developing Countries,” American Agricultural Economics Association, Vo.86. No.3. PP. 795-801.
• Mellahi, K. Guermat, C. Frynas, G. and AL- Bortamani, H (2003), “Motives for Foreign Direct Investment in Oman,” Thunderbird International Business Review, Vol.45. No.4. PP. 431-446.
• Miroshnik, V (2002), “Culture and International Management: A Review,” Journal of Management Development, Vol.21. No.7. PP. 521-544.
• Mmieh, F. and Frimpong, N (2004), “State Policies and the Challenges in Attracting FDI: A Review of the Ghana Experience,” Thunderbird of International Business Review, Vol.46. No.5. PP. 575-599.
• Ngowi, H. P (2001), “Can Africa Increase its Global Share of Foreign Direct Investment?,” West African Review, Vol.2. No.2. PP. 1-22.
• Onyeiwu, S (2000), “Foreign Direct Investment, Capital Out flows and Economic Development in the Arab World,” Journal of Development and Economic Policies, Vol.2. No.2. PP. 27-57.
• Onyeiwu, S (2003), “Analysis of FDI Flows to DCs, is the MENA Region Different?,” Paper presented at the Economic Research Forum, ERF 2003.
• Pan, Y. and Chi, P (1999), “Financial Performance and Survival of Multinational Corporations in China,” Strategic Management Journal, Vol.20. PP. 359-374.
• Robertson, C. and Watson, A (2004), “Corruption and Change: The Impact of Foreign Direct Investment,” Strategic Management Journal, Vol.25. No.4. PP. 385-396.
• Sadik, A. and Bolbol, A (2001), “Mobilizing International Capital for Arabic Economic Development: With Special Reference to the Role of FDI,” Arab Economic Journal, Vol.10. No.26. PP. 3–49.
• Sadik, A. and Bolbol, A (2003), “Attracting Foreign Direct Investment to the Arab Countries: Facts and Factors,” Mimeo, Arab Monetary Fund, Abu Dhabi.
• UNCTAD (2002), “Trade and Development Abroad,” World Investment Report: United Nations, New York and Geneva.
• UNDP (2002), “Arab Human Development Report”.
• World Bank, Global Development Finance: Country Tables, Several Issues.
How to Cite
Habash, Nojoud S. 2007. “The Contagion Disease That Affects Foreign Direct Investment In the MENA Countries”. Studies in Business and Economics 13 (2). https://doi.org/10.29117/sbe.2007.0036.
Section
Articles