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The Relationship between Economic Freedom and FDI versus Economic Growth: Evidence from the GCC Countries

Author

Listed:
  • Hichem Dkhili

    (College of Business Administration, Northern Border University, Arar 91431, Saudi Arabia)

  • Lassad Ben Dhiab

    (College of Business Administration, Northern Border University, Arar 91431, Saudi Arabia)

Abstract
This study aims to explain the role of economic freedom in attracting foreign investments and thus raising the level of economic growth. Through a study based on a sample composed of the Gulf Cooperation Council (GCC) countries. A standard model consisting of GCC countries (Saudi Arabia, United Arab Emirates, Qatar, Kuwait, and Oman) was used during the period from 1995 to 2017. We based on the analytical descriptive and secondly, we used a multivariate analysis based on the panel unit root test, the cointegration and finally the regression Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) following the existence of a long-term integration, which includes the modern standard methods to determine the role of economic freedom in raising foreign direct investment and thus economic growth in the second stage. The research findings from GCC countries support the literature, suggesting that there are indeed some indications that greater levels of economic freedom support higher rates of economic growth in a country.

Suggested Citation

  • Hichem Dkhili & Lassad Ben Dhiab, 2018. "The Relationship between Economic Freedom and FDI versus Economic Growth: Evidence from the GCC Countries," JRFM, MDPI, vol. 11(4), pages 1-17, November.
    • Handle: RePEc:gam:jjrfmx:v:11:y:2018:i:4:p:81-:d:184762
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    5. Ivana Brkić & Nikola Gradojević & Svetlana Ignjatijević, 2020. "The Impact of Economic Freedom on Economic Growth? New European Dynamic Panel Evidence," JRFM, MDPI, vol. 13(2), pages 1-13, February.
    6. Mawih Kareem AL Ani & Kavita Chavali, 2023. "The relationship between investment intensity and profitability measures from the perspective of foreign investors," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-11, December.
    7. Florije Govori & Amant Fejzullahu, 2020. "The Impact of Foreign Direct Investment by Economic Activity on Gross Domestic Product Growth in Kosovo," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 9, November.
    8. António Afonso & M. Carmen Blanco-Arana, 2023. "The nexus between economic freedom and economic growth in the LDCs. An empirical analysis for the period 2000-2021," Working Papers REM 2023/0297, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
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