Political and Institutional Determinants of Foreign Direct Investment: An Application for MENA Region Countries

Najeh Bouchoucha, Saloua Ben Ammou

Abstract: The objective of this work is to identify the determinants of foreign direct investment (FDI). In other words our aim is to specify the roles of political and institutional factors in attracting foreign direct investment We decompose these factors into three categories (political, policy risks and institutional). We use a panel data technique based on a sample of 20 MENAs region countries over the period 2002-2012. Empirical results show that only political factors and political risks are statistically significant.

Keywords: FDI, political risk factors, institutional factor, Panel