FDI and Economic Growth in the GCC: Does the Oil Sector Matter?

Elheddad, Mohamed and Bassim, Mohga and Ahmed, Rizwan FDI and Economic Growth in the GCC: Does the Oil Sector Matter? Economics and business letters. ISSN 2254-4380 (In Press)

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Abstract

This paper investigates the impact of economic sectors’ foreign direct investment (FDI) on economic growth by validating the resource curse hypothesis in the Gulf Cooperation Council (GCC) countries. Applying OLS (Fixed and Random effects), Instrumental Variables (IV) and Limited Information Maximum Likelihood (LIML) estimations, empirical results indicate that resource-FDI inflows hinder economic growth in the GCC economies, while non-resource FDI has an insignificant effect on growth. Moreover, the total Greenfield FDI inflows deter economic growth in GCC economies. These results give evidence on the crowding-out effect of resource-FDI. This paper opens new insights for policymakers in designing a comprehensive policy on direct FDI inflows (resource and non-resource) to stimulate growth for attaining sustainable economic development for the long run.

Item Type: Article
Additional Information: Accepted 10th February 2021
Uncontrolled Keywords: FDI; Economic Growth; Natural Resource Curse; Instrumental Variables (IV); Limited Information Maximum Likelihood (LIML)
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
Divisions: School of Humanities > Economics and International Studies
Depositing User: Rachel Pollard
Date Deposited: 31 Mar 2021 12:00
Last Modified: 31 Mar 2021 12:00
URI: http://bear.buckingham.ac.uk/id/eprint/507

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