Topics in Middle Eastern and North African Economies

Document Type

Article

Publication Date

9-1-2014

Abstract

Foreign direct investment (FDI) is a crucial ingredient of the global economy. In the Persian Gulf, FDI is a major source of economic growth, employment, technology, and productivity. Because of these benefits, attracting FDI in the Persian Gulf region has become a key element of strategies promoting economic development. Natural resources and environmental policy in host countries may affect the FDIeconomic growth relationship. There has been much dispute as to whether economies that are open and those with more natural capital and lax environmental policy grow faster. This paper examines whether natural resources and environmental policy in Persian Gulf countries alter the relationship between FDI and Persian Gulf’s economics growth. We estimate a linear dynamic panel-data model using data from Persian Gulf countries over the period 1980–2012.The results show that the impact of arable land, forest area and the interaction between FDI and environmental policy on economic growth is negative, but renewable internal freshwater resources flows, mineral depletion and energy use have a positive effect.

Identifier

2334-282X

Journal Title

Topics in Middle Eastern and North African Economies

ISSN

2334-282X

Publisher

Middle East Economic Association and Loyola University Chicago

Volume

16

Comments

Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles. http://www.luc.edu/orgs/meea/volume16/meea16.htm

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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