What is it about?
Studies examining the influence of institutions on FDI overlooked the fact that institutions are correlated with each other. This study overcomes this drawback by redefining institutions as a group allowing for this correlation. The study then examines the influence of these groups - stability and order, quality of public administration, and presence of democratic systems - on FDI flows to 17 Middle East and North Africa countries during the period 1984–2011.
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Why is it important?
This work is important in two respects. First, it provides a broader perspective on institutions, given the correlation between them. Second, it shows empirically the influence of those broad institutions on FDI flows to the MENA region. In particular, stability and order and the presence of a democratic system have a positive influence on FDI flows, while the quality of public administration has a surprisingly negative influence.
Perspectives
By looking deeper at how institutions correlate with each other in the MENA countries, this article has developed further my perception about institutions in the region. This approach can be very useful in embarking on institutional reforms not only in the MENA region but also in other regions and countries.
Professor Wasseem Mina
United Arab Emirates University
Read the Original
This page is a summary of: Institutional Clusters and FDI Flows to the MENA Region, January 2017, Springer Science + Business Media,
DOI: 10.1007/978-3-319-50164-2_14.
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