The Relationship between Economic Freedom and FDI versus Economic Growth: Evidence from the GCC Countries

Abstract

This study aims to explain the role of economic freedom in attracting foreign investments and thus raising the level of economic growth. Through a study based on a sample composed of the Gulf Cooperation Council (GCC) countries. A standard model consisting of GCC countries (Saudi Arabia, United Arab Emirates, Qatar, Kuwait, and Oman) was used during the period from 1995 to 2017. We based on the analytical descriptive and secondly, we used a multivariate analysis based on the panel unit root test, the cointegration and finally the regression Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) following the existence of a long-term integration, which includes the modern standard methods to determine the role of economic freedom in raising foreign direct investment and thus economic growth in the second stage. The research findings from GCC countries support the literature, suggesting that there are indeed some indications that greater levels of economic freedom support higher rates of economic growth in a country.

The Impact of Economic Freedom on Economic Growth? New European Dynamic Panel Evidence

“…This statistically significant relationship is not observed when the change of economic freedom was used as a regressor. Such findings generally corroborate the recent works of Dkhili and Dhiab (2018) for a sample of Gulf Cooperation Council countries and Bayar (2016) for a smaller sample of transitional countries in Europe.…”

Editorial for Applied Econometrics

“…Consequently, the authors showed the specific features of the systemic approach to management control by means of its determining factors: control environment, management strategies and budgetary system, operational control and the performance appraisal system. Dkhili and Dhiab (2018) explain the role of economic freedom in attracting foreign investments, and thus raising the level of economic growth. Through a study based on a sample composed of the Gulf Cooperation Council (GCC) countries.…”

Ekonomi̇k Özgürlükleri̇n Diş Ti̇caret Ve Doğrudan Yabanci Yatirimlara Etki̇si̇

“…Bu yüzden daha yüksek düzeyde ekonomik özgürlüğe sahip olan ülkeler, yabancı yatırımcılar için daha çekicidir (Bengoa ve Sanchez-Robles,2003:530). Yapılan çalışmaların birçoğunda da ekonomi özgürlüklerdeki artışın doğrudan yabancı yatırımları arttırdığı tespit edilmiştir (Bengoa ve Sanchez-Robles,2003;Kapuria-Foreman,2007;Azman-Saini vd.,2010;Ajide ve Eregha,2015;Hossain,2016;Moussa vd.,2016;Savaşan ve Dursun,2016;Badri ve Sheshgelani, 2017;Imtiaz ve Bashir, 2017;Dkhili ve Dhiab, 2018;Muslija, 2018). Dolayısıyla ekonomik ve politik istikrarsızlık yaşayan ülkelerde doğrudan yabancı yatırımlarda kaçışlar görülmektedir.…”

“…Ekonomik özgürlüklerle doğrudan yabancı yatırım arasındaki ilişkiyi ele alan çalışmalar genelde panel veri analiziyle test edilmiştir ve bu çalışmaların büyük çoğunluğunda iki değişken arasında pozitif bir ilişki tespit edilmiştir (Bengoa ve Sanchez-Robles,2003;Kapuria-Foreman,2007;Azman-Saini vd.,2010;Ajide ve Eregha,2015;Hossain,2016;Moussa vd.,2016;Savaşan ve Dursun,2016;Badri ve Sheshgelani, 2017;Imtiaz ve Bashir, 2017;Dkhili ve Dhiab, 2018;Muslija, 2018 (Pesaran, 2007:269). Ayrıca, CADF testi analizdeki gözlem sayısının tartışılan zaman boyutundan daha düşük veya yüksek olup olmadığı konusunda da tutarlı sonuçlar verir.…”