Review of Islamic Economics and Finance
Vol 4, No 2 (2021): Review of Islamic Economics and Finance : December 2021

Determinants of Foreign Direct Investment in GCC (Gulf Cooperation Council) Countries: Analysis of Economic Growth, Inflation, and Political Stability for the Period 2002-2018

M Widyarta Wijaya (Airlangga University)
Wijianto Wijianto (Airlangga University)
M Fikri Himmawan (Unknown)



Article Info

Publish Date
07 Dec 2021

Abstract

AbstractPurpose – This research investigates the factors of foreign investment inflows (PMA) that are encouraged in the member countries of the GCC (Gulf Cooperation Council).Methodology - The sample selection for observations was based on six countries, including the United Arab Emirates (UAE), Kuwait, Qatar, Oman, Bahrain, and Saudi Arabia. The data for this study were obtained from the World Bank and Asian Development Bank (ADB) database for the period 2002-2018. This study adopts panel regression analysis and uses the Random Effect Model.Findings - This research reveals that GDP and Inflation are positive and play a significant role in driving FDI inflows in GCC countries. Meanwhile, Political Stability (PSAV) does not have a substantial impact on FDI inflows in the GCC countries. This study shows that the GCC countries must provide a conducive investment environment that is represented by higher GDP growth and is involved in various international trade agreements as these factors have a higher likelihood of impacting inflows FDI. Other than that, rules describing investment priorities among members should be ratified immediately to reduce the percentage of FDI inflows out of GCC countries. Thus, this research provides significant insights for policymakers for the GCC countries to attract FDI inflows into the country.Keywords: Foreign Direct Investment, Gulf Cooperation Council Panel Regression. 

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Journal Info

Abbrev

rief

Publisher

Subject

Economics, Econometrics & Finance

Description

The aims of this Journal is to promote a principled approach to research on Islamic macroeconomics, Islamic microeconomics, Islamic development economics, Islamic monetary economics, Islamic public economics, Islamic political economics, Islamic leisure toursm, and Islamic financial technology. ...