Globalization, FDI and the Links with Economic Growth: An Empirical Investigation for MENA Countries

The present paper analyzes the impact of globalization and FDI inflows on economic growth in 14 MENA countries over the period 1995-2011, through the use of panel data analysis. The fixed effects specification reveals that globalization and FDI inflows seem to play a substantial role in explaining economic growth of the selected MENA countries. Likewise, governance and economic freedom act as catalysts for the MENA region’s economic growth.

Based on these results, it can be concluded that MENA countries can improve their growth performance by opening their doors more widely to the process of globalization and stabilizing political situation. Moreover, the MENA region’s decision-makers are committed to pursue investment-friendly policies and ensure well-functioning political and economic institutions. Further, contemporary and more comprehensive educational policies should be designed to emulate several technological trends.