International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

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 Volume 7, Issue 4 (April 2020), Pages: 84-90

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 Original Research Paper

 Title: The relationship of Arab economic integration to foreign direct investment in the Arab countries: Impact analysis using the augmented gravity model

 Author(s): Siham Riache 1, *, Bilal Louail 1, Ali Nabil Belouard 2

 Affiliation(s):

 1Department of Finance and Insurance, College of Business Administration, Northern Border University, Arar, Saudi Arabia
 2Department of Economics, College of Business Administration, University of M'Hamed BOUGARA Boumerdes, Boumerdès, Algeria

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 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0001-8021-4217

 Digital Object Identifier: 

 https://doi.org/10.21833/ijaas.2020.04.011

 Abstract:

This study aims to make contributions to the development of foreign direct investment in the Arab countries and make it a tool to activate the Arab economic integration. And try to investigate the specificity of prosperous global, regional blocs such as the European Union and the North American bloc to know the factors of success. It is focused on the relationship between foreign direct investment flows and the stages of Arab economic integration, especially Arab intra-trade. The extended gravity model relied on the impact of foreign direct investment in Arab intra-trade flows, which is considered a stage of economic integration and analysis during 1995-2017 on some Arab countries where statistics and the use of panel data were available. The results concluded that there is a negative and significant effect of the distance between two countries on the foreign trade flows, a positive and significant effect of inflation, i.e., the opposite of what was expected, as well as a positive and significant impact of the crude GDP of the exporting country and a negative impact of the crude product of the importing country but not significant, and a positive non-significant effect of the flows. FDI in exporting countries, the non-significant negative impact of FDI flows in importing countries. Since most of the studies on the subject did not address this impact, which makes this study useful for decision-makers in the Arab countries to take advantage of them to promote Arab economic integration, especially those countries seeking to open to the outside world. Through the results obtained, the Arab countries can benefit from them to attract the most significant possible amount of foreign investments, mainly Arab, as well as possible for large Arab companies to invest in Arab countries to achieve Arab economic integration. This study also presents a new proposition, which is to study the impact using the expanded gravity model of the state of Arab countries in a recent period. 

 © 2020 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords: Foreign direct investment, Arab economic integration, Augmented gravity model, Arab economies

 Article History: Received 16 October 2019, Received in revised form 22 January 2020, Accepted 23 January 2020

 Acknowledgment:

The authors gratefully acknowledge the approval and support of the deanship of the scientific research study (Grant No. BA-2018-3-9-F-8014) at the Northern Border University, Arar, Kingdom of Saudi Arabia.

 Compliance with ethical standards

 Conflict of interest: The authors declare that they have no conflict of interest.

 Citation:

 Riache S, Louail B, and Belouard AN (2020). The relationship of Arab economic integration to foreign direct investment in the Arab countries: Impact analysis using the augmented gravity model. International Journal of Advanced and Applied Sciences, 7(4): 84-90

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 Tables

 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 

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