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FDI response to political shocks: What can the Arab Spring tell us?

Hany Abdel-Latif, Hany Mohamed

Journal of Behavioral and Experimental Finance

Swansea University Author: Hany Mohamed

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DOI (Published version): 10.1016/j.jbef.2019.07.005

Abstract

This paper examines the FDI response to political shocks. We first investigate whether political or institutional quality is an important determinant of FDI inflows using a panel VAR model in a dataset of 146 countries over the period of 1989-2015. Then, we exploit the Arab Spring incidence to measu...

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Published in: Journal of Behavioral and Experimental Finance
ISSN: 22146350
Published: 2019
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa51109
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first_indexed 2019-07-17T15:37:32Z
last_indexed 2019-08-09T16:31:18Z
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spelling 2019-08-06T15:19:09.3595070 v2 51109 2019-07-17 FDI response to political shocks: What can the Arab Spring tell us? 2930976ccf31ef0c71f78f7cb47e2d5d Hany Mohamed Hany Mohamed true false 2019-07-17 This paper examines the FDI response to political shocks. We first investigate whether political or institutional quality is an important determinant of FDI inflows using a panel VAR model in a dataset of 146 countries over the period of 1989-2015. Then, we exploit the Arab Spring incidence to measure the short-run effects of political shocks on FDI flows using the differences-in-differences (DiD) estimator for a sub-sample of nineteen countries in the MENA region. We account for possible bias of the DiD estimator resulting from dealing with heterogeneous group of countries by using the propensity score matching based on the countries economic development and political settings. Our findings show that a positive shock to political quality would increase FDI flows which lends evidence to the importance of political quality as an important determinant of FDI flows. In addition, we find that the Arab spring has led to a drop in FDI flows to the MENA region. Journal Article Journal of Behavioral and Experimental Finance 22146350 FDI, Political Shocks, MENA Region, Arab Spring, Panel VAR 31 12 2019 2019-12-31 10.1016/j.jbef.2019.07.005 COLLEGE NANME COLLEGE CODE Swansea University 2019-08-06T15:19:09.3595070 2019-07-17T14:02:05.6284115 Hany Abdel-Latif 1 Hany Mohamed 2 0051109-06082019151723.pdf 51109.pdf 2019-08-06T15:17:23.2870000 Output 495484 application/pdf Accepted Manuscript true 2021-01-23T00:00:00.0000000 Released under the terms of a Creative Commons Attribution Non-Commercial No Derivatives License (CC-BY-NC-ND). true eng
title FDI response to political shocks: What can the Arab Spring tell us?
spellingShingle FDI response to political shocks: What can the Arab Spring tell us?
Hany Mohamed
title_short FDI response to political shocks: What can the Arab Spring tell us?
title_full FDI response to political shocks: What can the Arab Spring tell us?
title_fullStr FDI response to political shocks: What can the Arab Spring tell us?
title_full_unstemmed FDI response to political shocks: What can the Arab Spring tell us?
title_sort FDI response to political shocks: What can the Arab Spring tell us?
author_id_str_mv 2930976ccf31ef0c71f78f7cb47e2d5d
author_id_fullname_str_mv 2930976ccf31ef0c71f78f7cb47e2d5d_***_Hany Mohamed
author Hany Mohamed
author2 Hany Abdel-Latif
Hany Mohamed
format Journal article
container_title Journal of Behavioral and Experimental Finance
publishDate 2019
institution Swansea University
issn 22146350
doi_str_mv 10.1016/j.jbef.2019.07.005
document_store_str 1
active_str 0
description This paper examines the FDI response to political shocks. We first investigate whether political or institutional quality is an important determinant of FDI inflows using a panel VAR model in a dataset of 146 countries over the period of 1989-2015. Then, we exploit the Arab Spring incidence to measure the short-run effects of political shocks on FDI flows using the differences-in-differences (DiD) estimator for a sub-sample of nineteen countries in the MENA region. We account for possible bias of the DiD estimator resulting from dealing with heterogeneous group of countries by using the propensity score matching based on the countries economic development and political settings. Our findings show that a positive shock to political quality would increase FDI flows which lends evidence to the importance of political quality as an important determinant of FDI flows. In addition, we find that the Arab spring has led to a drop in FDI flows to the MENA region.
published_date 2019-12-31T04:02:52Z
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score 11.035655

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