A Quantitative Assessment of the UAE Foreign Ownership Law on Foreign Direct Investments

Abstract

This essay beginswith a discussion of the literature that links foreign direct investments to GDP per capita growth. Second, we reviewacademic literature on public policies, foreign direct investments and GDP per capita growth. Based on taht literatura review, we present our own quantitative analysis whichshows that foreign direct investments in the UAE has a net positive effect on output per capita growth. We further extend this analysis to show that UAE's foreign ownership law has a positive effect on foreign direct investment. By demonstrating that the foreign ownership law has affected FDI, which in turn affectedGDP per capita growth; we are able to provide the channel that connects FDI and GDP per capita growth. This implies that foreign ownership legislation is an important driver of output growth in UAE.