رابطه بین سرمایه گذاری خارجی، سرمایه های داخلی و رشد اقتصادی: شواهد تجربی از منطقه خاورمیانه و شمال آفریقا

The objective of this paper is to estimate an econometric model for analyzing the interrelationship between foreign direct investment and domestic capital and economic growth in 13 MENA countries by using a ‘growth model’ framework and simultaneous-equations models estimated by the Generalized Method of Moments (GMM) during the period 1990–2010. Our empirical results show that there is bi-directional causal relationship between foreign investment and economic growth, between domestic capital and economic growth, and there is uni-directional causal relationship from foreign direct investment to domestic capital for the region as a whole.

The nexus between economic growth and foreign investment, as well as economic growth and domestic capital, has been a subject of large academic researches over the past few decades. These researches can be categorized into three strands. The first strand has examined the impact of foreign investment and domestic capital on the gross domestic product (GDP) (see, Anwar and Sun, 2011, Soltani and Ochi, 2012 and Borensztein et al., 1998). The advent of endogenous growth Barro and Sala-i-Martin (1995) has encouraged research on the transmission channels of FDI on economic growth in the long run. According to neoclassical growth models, the long-run growth in per capita income is zero or equal to the rate of technical progress, which is exogenous. The FDI can only affect economic growth in the short term on condition that the marginal productivity of capital decreases, the host economy converges to a steady-state and the FDI has no permanent impact on economic growth. It is only through permanent technology shocks that FDI affects economic growth of the host country. For example, based on the following periods 1970–1979 and 1980–1989, Borensztein et al. (1998) examine the effect of FDI on economic growth. They found that FDI positively influence economic growth and that FDI and domestic investment were complementary. By using panel data of 18 countries in Latin America, Bengoa and Sanchez-Robles (2003) conclude that the effect of FDI on economic growth is positive only when these countries have adequate human capital, economic stability and liberalized markets. By making use of the data for the period 1975–2009, Soltani and Ochi (2012) considered the causal relationship between FDI and economic growth in Tunisia. They found that FDI causes significantly economic growth. Then, De Mello (1997) found that the impact of FDI on economic growth of the host country depends on the degree of efficiency of domestic firms. The long-term growth depends on the rate of time preference, and on the productivity of domestic capital and the degree of complementarily between domestic and foreign capital. Anwar and Sun (2011) have also shown that foreign direct investment and domestic capital have a positive significant impact on economic growth. Therefore, Adams (2009) analyzes the impact of foreign direct investment on economic growth in Sub-Saharan Africa and found that FDI is positively and significantly correlated with economic growth. Recently, Azman-Saini et al. (2010) explored the systemic link between foreign direct investment (FDI) and economic growth approved that FDI by itself has no direct (positive) effect on the output growth. In contrast, Tang et al. (2008) determined that there is one-way causality from FDI to economic growth in China, while the causal link between domestic capital and economic growth is bilateral. The second strand of studies has examined the impact of economic growth and foreign direct investment on the domestic capital. This area is relatively less researched and can be considered as nascent. Based on panel data for the period 1970–1990 involving OECD and non-OECD countries, De Mello (1997) examined the impact of FDI on capital accumulation, output and total factor productivity growth. He suggests that FDI provides a boost for economic growth in the long run through technological progress and knowledge spillovers. However, he underlines that the FDI-led growth depends on the degree of complementarily and substitution between FDI and domestic investment. By using panel data of 69 developing countries, Borensztein et al. (1998) found that there is bi-directional relationship between foreign direct investment and domestic capital. The third strand of studies has examined the impact of economic growth and domestic capital on foreign direct investment. In addition, Nguyen and Nguyen (2007) have identified the two-way linkage between FDI and economic growth in which FDI promotes economic growth and, in turn, economic growth is viewed as a tool to attract FDI. Tsai (1994) employed a simultaneous equation system to test two-way linkages between FDI and economic growth for 62 countries between 1975–1978 and 51 countries for the period 1983–1986. His work supports the view that two-way linkages exist between FDI and growth. Besides, Anwar and Nguyen (2010) study the two-way linkage between economic growth and FDI in 61 provinces of Vietnam over the period 1996–2005. They support the view that, in overall terms, reinforcing two-way linkage between FDI and economic growth exists in Vietnam and explored the link between FDI and economic growth across seven regions of Vietnam. The empirical analysis reveals that a two-way linkage between FDI and economic growth exists only in four regions. Finally, based on the three previous strands of research we can see that higher economic growth requires more domestic capital. It has also been found that domestic capital plays a determinant role in the increase of FDI inflows. It is therefore worthwhile to investigate the nexus between FDI, domestic capital and economic growth by considering them simultaneously in a modeling framework. Therefore, the objective of the present study is to examine the causality links between the above three variables for 13 MENA countries by using a ‘growth model’ framework and simulataneous-equations models estimated by the generalized method of moments (GMM) during the period 1990–2010. The present study is different from the previous studies in the following ways. First, this paper used dynamic simultaneous-equations modeling to study the three-way linkages between FDI inflows, capital stock and economic growth for a panel consisting of 13 MENA countries. However, to the best of our knowledge, none of the empirical studies have focused to investigating the three-way linkages between FDI-capital stock-growth by using simultaneous-equations modeling with ‘growth model’ framework. The model allows to examine at the same time the interrelationship between economic growth, foreign direct investment and domestic capital. Specifically, this study uses a three equations structural model that allows to simultaneously examining the impact of (i) the foreign and domestic capital on economic growth (ii) the economic growth and domestic capital on FDI inflows (iii) the economic growth and foreign investment on domestic capital. Second, we use a simultaneous equation model which follows the spirit of the conventional ‘growth model’ framework. Growth models, because they only depict short-run impacts, cannot be modeled within a cointegrating framework. The reason is simple. All variables in a growth form model are stationary, while cointegration (long-run impacts) demands that all variables, as a pre-requisite, need to be non-stationary. Our approach in this study is to estimate the short-run elasticities and not to estimate the long-run elasticity given our growth form modeling approach. There is a strong motivation for us to apply a growth form approach to analyze the interrelationship between foreign investment, domestic capital and economic growth. Third, with regard to emerging economies, our literature survey typically suggests that few studies have carried out the interrelationship between growth-foreign investment-domestic capital. They mainly consider the major Asian and Latin American countries and less attention has been given to smaller emerging countries, especially, in the Middle East and North Africa (MENA) region (see, De Mello, 1997, Borensztein et al., 1998, Anwar and Nguyen, 2010 and Anwar and Sun, 2011). The paper is organized as follows. The next section describes the used data and the econometric model. Section 3 presents the main results. Section 4 presents the concluding remarks and policy implications.

While the literature on the causality links between domestic capital, FDI and economic growth for individual countries and for panels of countries has increased over the last few years, there is no study that examines this interrelationship using a growth framework and simultaneous equations models. The objective of the present work is to fill this research gap by examining the above interaction for 13 MENA countries over the period 1990–2010. Our analysis suggests that (i) there is bi-directional causal relationship between foreign investment and economic growth; (ii) there is uni-directional causal relationship from foreign investment to domestic capital; and (iii) there is bi-directional causal relationship between domestic capital and economic growth for the region as a whole. We find also that there is an indirect effect of financial development in MENA region on economic growth via the stock of domestic capital, i.e., the financial development significantly affects their stock of national capital which contributes to economic growth. Therefore, an increase in the stock of human capital promotes economic growth but growth in the government expenditure reduces economic growth and its effect on the stock of domestic capital is also negative. The foreign direct investment is contributing to the growth of the domestic capital stock but growth in the domestic capital stock does not significantly contribute to the stock of FDI in MENA region. Finally, the degree of openness and the real exchange rate produce a significant impact on the stock of foreign direct investment in MENA region. This result supports the idea that openness policy through the abolition of trade barriers and free movement of capital flows is a source of FDI attractiveness From the results presented in this paper, it can be argued that (i) the MENA countries should orient its economic policies to changes and improve the government consumption and the stock of human capital to support a sustainable economic growth because increased spending on advanced education and training contributes to economic growth by easing the adoption of foreign technologies; (ii) governments are unable to take full advantage of foreign direct investment inflows because: their financial market is insufficiently developed, the spending on education is insufficient, and technology gap between the foreign and domestic firms is too large. Therefore, governments must improve political stability, law and order, socioeconomic conditions and the investment profile and must reduce the level of corruption to attract more FDI and domestic investment because the generated value added in many sectors and reduced unemployment rate; (iii) the financial sector should provide sufficient resources by creating new instruments, institutions and organizations for the demand of real sector with the economic growth leads development of the financial sector; (iv) more prudent policies might involve removing barriers that prevent local firms from establishing adequate linkages, improving local firms' access to inputs, technology, and financing, and streamlining the procedures associated with selling inputs. But we might also seek to improve domestic conditions, which should have the dual effect of attracting foreign investment (Alfaro et al., 2006) and enabling host economies to maximize the benefits of such foreign investment.