Topics in Middle Eastern and North African Economies

Document Type

Article

Publication Date

5-1-2023

Abstract

This paper analyzes the role of the quality of governance on financial development to create favorable conditions to attract FDI in the MRNA region. Using a panel data and GMM method from 1985 to 2021, results show that the banking development variables (credit to the private sector) and capital account openness improve the attractiveness of FDI inflows. This effect is higher for countries above the governance threshold. However, the effects of the stock market variables (stock market value traded and capitalization) are significant and positive only in the developed group beyond a certain level of governance. Besides, the impacts of financial variables on the FDI attractiveness are less important in the natural resource endowed countries.

Journal Title

Topics in Middle Eastern and North African Economies

ISSN

2334-282X

Publisher

Middle East Economic Association and Loyola University Chicago

Volume

25

Issue

1

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.

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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Economics Commons

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