Determinants of Resource-Seeking Foreign Direct Investment: Co-Integration and Causality Analysis for Saudi Arabia

Akhtar, Mohammad Hanif; Khan, Mohammad Bashir; Hussain, Shahzad

doi:10.9734/bjemt/2013/3739

Cited by 6 publications

(5 citation statements)

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“…There is some evidence in the literature confirming the positive relationship between the levels of openness in Arab countries. 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.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Recently, Elheddad (2017) confirmed that natural resources have a negative impact on total FDI inflows to the GCC countries. 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.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Moreover, Mohamed and Sidiropoulos (2010 and Al-Khouri (2015) highlight natural resources as one of the main internal determinants of FDI inflows in the MENA region. Recently,Elheddad (2017) confirmed that natural resources have a negative impact on total FDI inflows to the GCC countries 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.…”

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confidence: 96%

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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: 99%

Section: Literature Reviewmentioning

confidence: 99%

mentioning

confidence: 96%

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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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“…Additionally, consistent with the Phillips-Ouliaris, and the Engle-Granger cointegration models, when elements are cointegrated, there should be an error correction model (ECM) that summarizes the short-run obscured impulses or modifications of the cointegrated elements in the direction of their equilibrium values (Akhtar et al, 2013). Consequently, drawing from Wooldridge (2016), the model specification is the transparent error correction model, and is appropriate in determining the short-run relationship between FDI inflows and the selected macroeconomic elements: ∆kt = β0 + β1∆kt-1+ δ0∆gt + δ1∆gt-1+ θjt-1 + εt (15) = β0 + β1∆kt-1+ δ0∆gt + δ1∆gt-1 +θ(kt-1 -βgt-1) + εt Where E(εt|Pt-1) = 0, and Pt-1 have values in ∆gt and all previous statistics of g and k. Moreover, θ(kt-1 -βgt-1) is the error correction term and is an instance of an error correction model.…”

Section: Methodsmentioning

confidence: 95%

“…Additionally, because of the characteristics of time series, it is central to evaluate the stationarity of the data by utilizing the Augmented Dickey Fuller (ADF), the Phillips-Perron (PP), and the Kwiatkowski, Phillips, Schmidt, and Shin (KPSS) tests for unit root (Eita, 2012;Kwiatkowski et al, 1992;Phillips & Perron, 1988;Silvia et al, 2014;Woolridge, 2016) on individual elements before the exploration of Equation ( 14). It is likely the regression output will be inaccurate in the practicable occurrence the time series are non-stationary (Akhtar et al, 2013). Against this backdrop, differencing the data will correct this dilemma.…”

Section: Methodsmentioning

confidence: 99%

Environmental Pollution and Economic Growth Determinants in Foreign Direct Investment Inflows: The Case for Sub-Saharan Sierra Leone

Mansaray

2023

IJARBSS

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The primary objective of the present research was the examination of environmental pollution, economic growth, and supplementary selected macroeconomic elements as determinants of foreign direct investment inflows into Sub-Saharan Sierra Leone for the postconflict period, 2002-2020, and whether the association between the determinants and foreign direct investment is long-term and short-term. The research methodology was quantitative, and the dataset was time series with 76 observations and 10 variables. Using the AR(2) model, the findings indicated the lags of foreign direct investment, gross fixed capital formation, carbon dioxide, trade, and population growth were significant determinants of foreign direct investment inflows. Furthermore, applying the Phillips-Ouliaris cointegration model, the results indicated a statistically significant long-run association between foreign direct investment and, at least, one determinant (Rho = -39.458, Tau = -5.024, p < .05). Additionally, the error correction model (errorECM1) applied to explore the short-run deviation from the long-run had the expected sign, and was statistically significant (βerrorECM1 = -.524, SE = .158, t = -3.31, p = .002), representing a speedy conversion movement to long-run equilibrium of about 52.4% annually. Nonetheless, the research restricted itself to 19 post-conflict years (2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017)(2018)(2019)(2020), which may be inadequate to recognize the comprehensive determinant of foreign direct investment inflows. Succeeding studies must embrace additional years, including pre-conflict periods, to recognize the comprehensive determinants of foreign direct investment inflows into Sub-Saharan Sierra Leone.

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Attracting and retaining FDI: Africa gas and oil sector

2023

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Determinants of Resource-Seeking Foreign Direct Investment: Co-Integration and Causality Analysis for Saudi Arabia

Cited by 6 publications

References 15 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

Environmental Pollution and Economic Growth Determinants in Foreign Direct Investment Inflows: The Case for Sub-Saharan Sierra Leone

Attracting and retaining FDI: Africa gas and oil sector

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