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Linking FDI Inflows to Economic Growth in North African Countries

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  • Anis Omri
  • Amel Sassi-Tmar
Abstract
This paper tries to examine the interrelationship between foreign direct investment (FDI) inflows and the economic growth for three African economies, namely, Tunisia, Morocco, and Egypt during 1985–2011. Our analysis, which is based on a simultaneous equations model, reveals that in overall terms a mutually promoting two-way linkage between FDI and economic growth exists in these countries. Using the generalized method of moments (GMM), we find that the two-way linkage between FDI inflows and economic growth has been verified in all three economies, i.e., high level of foreign direct investment inflows had accelerated economic growth and high economic growth in these economies does send positive signals to prospective foreign investors. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Anis Omri & Amel Sassi-Tmar, 2015. "Linking FDI Inflows to Economic Growth in North African Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(1), pages 90-104, March.
    • Handle: RePEc:spr:jknowl:v:6:y:2015:i:1:p:90-104
    DOI: 10.1007/s13132-013-0172-5
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    More about this item

    Keywords

    Economic growth; FDI inflows; GMM estimator; North African countries;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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