The Impact of Foreign Direct Investments on Economic Growth: The Case of MENA Region

The main purpose of this paper is to investigate relationship between foreign direct investment and economic growth for MENA countries from 1990 to 2014. We firstly tested heterogeneity and cross sectional dependence and found that all series have homogeneity and cross sectional dependence. For that reason, Hadri Kruzomi and Pesaran et al. Multifactor Error Structure panel unit root tests were used. For obtaining long-run relationship, we used Weterlund’s panel and group cointegration tests. The results supported the long-run relationship, therefore, we used Common Correlated Effect Model, thanks to this method, and coefficients for each cross-section unit could be calculated individually.Foreign direct investment, economic growth, MENA, panel cointegratio