New exports matter: Discoveries, foreign direct investment and growth, an empirical assessment for Middle East and North African countries

Abstract

Export diversification has become a priority goal for the development of the Middle East and North African (MENA) countries. In this article, we aim at measuring both the effects of exports' diversification on growth in MENA countries and the way new exports and foreign direct investment (FDI) interact with each others in the process of growth. Although the effects of FDI on growth have been scrutinized by numerous studies up to now, the effects of diversification and discoveries in export have only very recently been assessed. But no one has made explicit the way FDI and export discoveries interact in the growth process. A model is estimated by the system-generalized method of moments and we provide robust evidence that export discovery and FDI stimulate gross domestic product (GDP) growth in our sample of countries, and that FDI does not necessarily have the same effect on growth according to the level of discovery of the country. We also show that the joint positive effect of new exports and of imports suggest that technological spillover from import but also from the integration to global value chains are likely to occur in our sample of countries.Export diversification, FDI, growth, MENA, GMM system,

Export composition and economic growth: evidence from South Asian countries

“…Nicet-Chenaf and Rougier (2011) examined the effect of exports diversification on economic growth as well as the ways foreign direct investment and exports interact with each other in the MENA countries. They found that export diversification and FDI increases economic growth, while imports are the source of technological spillover in the developing countries and facilitates global integration.…”

Mauritania Country Economic Memorandum

“…Source: UN-COMTRADE and authors' calculations. (Amighini abd Sanfilippo, 2014;Nicet-chenaf and Rougier, 2011). Compared to its peers, Mauritania has attracted a significant amount of FDI over the past decade (Figure 28), but extractive industries were the main destination of these inflows (Figure 29).…”