Risk Instability and the Pattern of Foreign Direct Investment in the Middle East and North Africa Region

20 Pages Posted: 15 Feb 2006

See all articles by Edward Gemayel

Edward Gemayel

International Monetary Fund (IMF) - Middle East and Central Asia Department

Date Written: August 2004

Abstract

This paper demonstrates that instability associated with investment risk is critical in explaining the level of foreign direct investment for the Middle East and North Africa (MENA) countries, which generally have higher investment risk than developed countries. The empirical results support this hypothesis, whether either the standard deviation or the interquartile range is used as a measure of instability, in a dynamic panel model. The paper recommends a reorientation of policies toward those with a longer-term focus in order to help lower the degree of risk instability for MENA countries.

Keywords: Foreign direct investment, Multinational firms, MENA countries

JEL Classification: F21, F23, O53

Suggested Citation

Gemayel, Edward, Risk Instability and the Pattern of Foreign Direct Investment in the Middle East and North Africa Region (August 2004). IMF Working Paper, Vol. , pp. 1-20, 2004. Available at SSRN: https://ssrn.com/abstract=878964

Edward Gemayel

International Monetary Fund (IMF) - Middle East and Central Asia Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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