Locational Determinants Of Foreign Direct Investment In The Kingdom Of Saudi Arabia PDF Download

This analysis investigates the determinants of foreign direct investment (FDI) inflows into the economies of the Kingdom of Saudi Arabia, United Arab Emirates, Venezuela, Singapore, and Switzerland. This paper adds to the body of research on the significance of both economic and institutional factors affecting foreign investment inflows. After discussing the general economic structure of Saudi Arabia and basic FDI trends, this paper reviews some of the relevant literature on the subject. Two models were estimated, one using logged FDI and the level of FDI, both were adjusted for currency differentials. The empirical results of this study show a positive relationship between GDP growth rates, the availability and reliability of infrastructure, and both logged FDI and FDI levels. Moreover, results suggest that the host country's regulatory framework is also a significant predictor of foreign investment levels. Further, rising imports and other factors that suggest a more open economy were associated with higher FDI while government incentives and possessing natural resources were not. This research concludes with policy recommendations to increase foreign investment competitiveness.