Labor Market Flexibility and FDI Flows: Evidence from Oil-Rich GCC and Middle Income Countries

33 Pages Posted: 8 Mar 2015

See all articles by Wasseem Mina

Wasseem Mina

UAE University; Economic Research Forum for the Arab Countries

louis jaeck

United Arab Emirates University (UAEU)

Date Written: March 4, 2015

Abstract

In this paper we empirically examine the impact of labor market flexibility on FDI flows to oil-rich GCC and compare it to middle income countries in 2006-2011. We account for potential endogeneity and nonstationarity and adopt system GMM and IV estimation methodologies. Our findings show that in middle income countries overall flexibility increases FDI flows under both system GMM and IV methodologies. In GCC countries overall LMF decreases FDI flows under system GMM methodology. Results also show a positive “GCC region” influence outweighing the negative flexibility influence. Growth potential and infrastructure development matter for both GCC and middle income countries.

Keywords: Labor markets, FDI, GCC, Middle income countries, UAE

JEL Classification: F21, J3, J5, J6

Suggested Citation

Mina, Wasseem and jaeck, louis, Labor Market Flexibility and FDI Flows: Evidence from Oil-Rich GCC and Middle Income Countries (March 4, 2015). Available at SSRN: https://ssrn.com/abstract=2575024 or http://dx.doi.org/10.2139/ssrn.2575024

Wasseem Mina (Contact Author)

UAE University ( email )

College of Business and Economics
P.O.Box 17555
Al Ain, Abu Dhabi 17555
United Arab Emirates

Economic Research Forum for the Arab Countries ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

Louis Jaeck

United Arab Emirates University (UAEU) ( email )

College of Business and Economics
P.O.Box 17555
Al Ain, Abu Dhabi 17555
United Arab Emirates

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
102
Abstract Views
655
Rank
475,729
PlumX Metrics