Institutional quality and FDI inflows in Arab economies

This study empirically examines the impact of institutional quality on FDI inflows in the Arab region. The analysis is performed by employing system GMM estimation in panel data comprising 16 Arab countries over the period 1984-2012. The study finds that the institutional quality variables of economic freedom, ease of doing business and international country risk (ICRG) have a positive and significant impact on FDI inflows in Arab economies. The results of this study have several implications for policy makers.