The Effect of Economic, Financial, and Political Risks on Foreign Direct Investment in the Selected Countries of the MENA Region

Foreign direct investment is a critical and leading effective component of economic growthand is influenced by many economic, political and social factors, including national risk. Thepurpose of this study is to examine the effects of three types of economic, financial andpolitical risks on foreign direct investment in 10 selected countries of the MENA region. Forthis purpose, the Panel Data method has been used for 2000-2017 period. The results of theresearch show that the negative and significant effect of all three economic, financial andpolitical risk factors on foreign direct investment, with the most significant effect of theeconomic risk variable. Moreover, the effect of GDP and trade openness on foreign directinvestment is positive and significant, while the effect of inflation rate on attracting foreigndirect investment is negative and significant.

Keywords:

Economic Risk , Political Risk , Financial Risk , FDI , Panel Data