FDI and economic growth in the GCC: Does the oil sector matter?

Mohamed Elheddad; Mohga Bassim; Rizwan Ahmed

doi:10.17811/ebl.10.3.2021.178-190

FDI and economic growth in the GCC: Does the oil sector matter?

Mohamed Elheddad, Mohga Bassim, Rizwan Ahmed

Research output: Contribution to journal › Conference article › peer-review

9 Citations (Scopus)

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.

Original language	English
Pages (from-to)	178-190
Number of pages	13
Journal	Economics and Business Letters
Volume	10
Issue number	3
Early online date	2 Aug 2021
DOIs	https://doi.org/10.17811/ebl.10.3.2021.178-190
Publication status	Published - 1 Sept 2021
Externally published	Yes
Event	School of Banking Conference: Contemporary Issues In Banking And Finance: Sustainability, Fintech And Uncertainties - University of Economics Ho Chi Minh City, Ho Chi Minh City, Viet Nam Duration: 30 Jul 2020 → 31 Jul 2020 https://sites.google.com/ueh.edu.vn/sobc2020

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities

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10.17811/ebl.10.3.2021.178-190Licence: CC BY-NC-ND

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title = "FDI and economic growth in the GCC: Does the oil sector matter?",

abstract = "This paper investigates the impact of economic sectors{\textquoteright} 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.",

keywords = "Economic growth, FDI, Instrumental variables (IV), Limited information maximum likelihood (LIML), Natural resource curse",

author = "Mohamed Elheddad and Mohga Bassim and Rizwan Ahmed",

note = "Special Issue Selected papers from SOBC2020 (Guest Editor: Toan Luu Duc Huynh) Publisher Copyright: {\textcopyright} 2021, Oviedo University Press. All rights reserved. Copyright: Copyright 2021 Elsevier B.V., All rights reserved.; School of Banking Conference : Contemporary Issues In Banking And Finance: Sustainability, Fintech And Uncertainties, SOBC 2020 ; Conference date: 30-07-2020 Through 31-07-2020",

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doi = "10.17811/ebl.10.3.2021.178-190",

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TY - JOUR

T1 - FDI and economic growth in the GCC

T2 - School of Banking Conference

AU - Elheddad, Mohamed

AU - Bassim, Mohga

AU - Ahmed, Rizwan

N1 - Special Issue Selected papers from SOBC2020 (Guest Editor: Toan Luu Duc Huynh) Publisher Copyright: © 2021, Oviedo University Press. All rights reserved. Copyright: Copyright 2021 Elsevier B.V., All rights reserved.

PY - 2021/9/1

Y1 - 2021/9/1

N2 - 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.

AB - 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.

KW - Economic growth

KW - FDI

KW - Instrumental variables (IV)

KW - Limited information maximum likelihood (LIML)

KW - Natural resource curse

UR - https://www.scopus.com/pages/publications/85112026582

U2 - 10.17811/ebl.10.3.2021.178-190

DO - 10.17811/ebl.10.3.2021.178-190

M3 - Conference article

AN - SCOPUS:85112026582

SN - 2254-4380

VL - 10

SP - 178

EP - 190

JO - Economics and Business Letters

JF - Economics and Business Letters

IS - 3

Y2 - 30 July 2020 through 31 July 2020

ER -

FDI and economic growth in the GCC: Does the oil sector matter?

Abstract

UN SDGs

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