The economic growth– foreign direct investment nexus

In this paper investigates the relationship between foreign direct investment and economic growth. On the one hand the effect of FDI on the economies of the MENA region, and, on the other hand, the impact of the economic growth of these countries on the attractiveness of FDI. In fact, we deal with the interrelationships between economic growth and FDI by using panel data models with simultaneous equations by Generalized Method of Moments (GMM) for the period 1998-2011. Our results show that there is bidirectional causality between economic growth and FDI. These empirical perspectives are particularly attractive to politicians because they help them build sound economic policies to sustain economic development and improve their level of attractiveness