A Long-Run Dynamic Analysis of FDI, Growth and Oil Export in GCC Countries: An Evidence from VECM Model

Ahmed Saddam, Fatimah Kari

Abstract


This study investigates a long-run dynamic relationship of GDP, crude oil export and FDI inflows in GCC countries; The United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. The methodology adopted is based on Error Correction Model (VECM) which involves 195 stationary balanced observations over the period 2000-2010. Two major objectives were tested, which are; Impulse response function and Variance Decomposition method. The empirical analysis shows that a shock of FDI inflows will cause a parallel negative influence on the oil export and GDP.  As well as FDI inflows are highly linked to GDP compared to oil export. 


Keywords


FDI, GCC, GDP, oil export, VECM

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DOI: http://dx.doi.org/10.3968%2Fj.css.1923669720141001.4214

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