International Journal of

ADVANCED AND APPLIED SCIENCES

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

Frequency: 12
line decor
  
line decor

 Volume 9, Issue 4 (April 2022), Pages: 97-105

----------------------------------------------

 Original Research Paper

 Title: The impact of FDI on foreign trade in Arab countries

 Author(s): Hosameldin H. Ismail 1, 2, *

 Affiliation(s):

 1Department of Administrative Sciences, Northern Border University, Arar, Saudi Arabia
 2Industrial Relations, Workers University, Zagazig, Egypt

  Full Text - PDF          XML

 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0003-1198-5848

 Digital Object Identifier: 

 https://doi.org/10.21833/ijaas.2022.04.012

 Abstract:

This study aims to identify the reality of FDI in Arab countries and analyze the relationship between FDI and foreign trade in Arab countries during the period 2000-2018. Statistical analysis tools such as the correlation coefficient and ANOVA analysis were used to test the significance of the linear regression between the variables, to analyze the relationship between FDI (independent variable) and all of the Arab exports and imports, trade balance, and Arab foreign trade (dependent variable). Despite the rapid liberalization programs of investment systems and the trend towards privatization and liberalization of economic activity and joining the WTO (hence, WTO), and other measures, the flow of foreign investments to Arab countries continues. Only three countries (UAE-Egypt-Oman) accounted for 68.5% of the total FDI coming to Arab countries in 2018. This indicates the weakness of many other Arab countries in attracting FDI. Results showed that the European Union is the leading trading partner of the Arab countries. The UAE and France topped the countries investing in the Arab countries. The statistical analysis results showed that the correlation between FDI (as an independent variable) and Arab foreign trade (as a dependent variable) is a positive, medium-strength. They also proved that (17.8%) of Arab foreign trade could be explained using FDI, while the remaining percentage is attributed to other variables. 

 © 2022 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: FDI, Arab foreign trade, Exports, Imports, Trade balance

 Article History: Received 29 October 2021, Received in revised form 7 February 2022, Accepted 13 February 2022

 Acknowledgment 

The author gratefully acknowledges the approval and the support of this research study by the Grant No. com -2018 -3-9-F -8040 from the Deanship of Scientific Research at Northern Border University, Arar, KSA.

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Ismail HH (2022). The impact of FDI on foreign trade in Arab countries. International Journal of Advanced and Applied Sciences, 9(4): 97-105

 Permanent Link to this page

 Figures

 No Figure

 Tables

 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9

----------------------------------------------      

 References (17)

  1. Benmamoun M, Lehnert K, Kim SH, and Kalliny M (2016). The spillover effect of international trade and investment flows: Spotlight on Arab unrest. The Journal of Developing Areas, 50: 59-76. https://doi.org/10.1353/jda.2016.0095   [Google Scholar]
  2. Bhawsar P and Chattopadhyay U (2015). Competitiveness: Review, reflections and directions. Global Business Review, 16(4): 665-679. https://doi.org/10.1177/0972150915581115   [Google Scholar]
  3. Boltho A (2020). Export-led growth or growth-led exports? Western Europe in the" golden age". The European Journal of Comparative Economics, 17(2): 185-203.   [Google Scholar]
  4. Caselli F, Koren M, Lisicky M, and Tenreyro S (2020). Diversification through trade. The Quarterly Journal of Economics, 135(1): 449-502. https://doi.org/10.1093/qje/qjz028   [Google Scholar]
  5. Dkhili H (2019). Does foreign direct investment spur economic growth in an oil-based country? Evidence from Saudi Arabia. International Journal of Advanced and Applied Sciences, 6(1): 73-80. https://doi.org/10.21833/ijaas.2019.01.010   [Google Scholar]
  6. Gaies B, Guesmi K, Porcher T, and Boroumand R (2020). Financial instability and oil price fluctuations: Evidence from oil exporting developing countries. The European Journal of Comparative Economics, 17(1): 55-71.   [Google Scholar]
  7. Gnangnon SK (2018). Export upgrading in donor and recipient countries and bilateral development aid allocation. The European Journal of Comparative Economics, 15(2): 249-276.   [Google Scholar]
  8. Hassan M (2017). Determinants of foreign direct investment in the Middle East Region: An empirical analysis. Asian Social Science, 13(11): 47-53. https://doi.org/10.5539/ass.v13n11p47   [Google Scholar]
  9. Holsapple E, Ozawa T, and Olienyk J (2006). Foreign “direct” and “portfolio” investment in real estate: An eclectic paradigm. Journal of Real Estate Portfolio Management, 12(1): 37-47. https://doi.org/10.1080/10835547.2006.12089735   [Google Scholar]
  10. Immurana M, Boachie MK, and Kisseih KG (2021). Effects of foreign direct investment and trade on the prevalence of tobacco consumption in Africa: A panel study. Globalization and Health, 17: 122. https://doi.org/10.1186/s12992-021-00769-2   [Google Scholar] PMid:34666776 PMCid:PMC8524922
  11. King T, Loncan T, and Khan Z (2021). Investment, leverage and political risk: Evidence from project-level FDI. Journal of Corporate Finance, 67: 101873. https://doi.org/10.1016/j.jcorpfin.2020.101873   [Google Scholar]
  12. Lin L, Mihov A, Sanz L, and Stoyanova D (2019). Property rights institutions, foreign investment, and the valuation of multinational firms. Journal of Financial Economics, 134(1): 214-235. https://doi.org/10.1016/j.jfineco.2019.03.001   [Google Scholar]
  13. Malawi AI and Nawasrha AH (2020). The impact of foreign direct investment on the balance of trade in Jordan (1975-2017). Zarqa Journal for Research and Studies in Humanities, 20: 2. https://doi.org/10.12816/0056061   [Google Scholar]
  14. OECD (2018). Background note: FDI in fragile and conflict-affected situation in the Middle East and North Africa: Trends and policies. Background note for the MENA-OECD Economic Resilience Task Force, Islamic Development Bank, Jeddah, Kingdom of Saudi Arabia: 1-48. 
  15. Rădulescu M and Druica E (2014). The impact of fiscal policy on foreign direct investments. Empiric Evidence from Romania. Economic Research-Ekonomska Istraživanja, 27(1): 86-106. https://doi.org/10.1080/1331677X.2014.947133   [Google Scholar]
  16. Riache S, Louail B, and Belouard A (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. https://doi.org/10.21833/ijaas.2020.04.011   [Google Scholar]
  17. Susic I, Stojanovic-Trivanovic M, and Susic M (2017). Foreign direct investments and their impact on the economic development of Bosnia and Herzegovina. In the IOP Conference Series: Materials Science and Engineering, IOP Publishing, Baia Mare, Romania, 200: 012019. https://doi.org/10.1088/1757-899X/200/1/012019   [Google Scholar]