The impact of the economic freedom index on foreign direct investment climate An Empirical Study for the period 1995-2010 (Prototypical Tunisia, Bahrain) | ||
magazine of college Administration&Economics for economic &administration & financial studies | ||
Article 1, Volume 174, Issue 11, June 2016, Pages 46-79 | ||
Abstract | ||
Abstract The Index of Economic Freedom considered the most important economic indicators that affect the size and type of foreign direct investment (FDI), so many economic institutions has formed a set of criteria, later renamed indicators, which would provide information to investors to enter their money into economies without the other, according to the high points of these indicators, among the most important of these indicators is the Index of Economic Freedom, which consists of ten variables, and in turn distributes these variables on a variety of factors, and these variables are (trade policy, financial burden of government, government interference with the economy, monetary policy, capital flows and foreign investment policies, banking, prices and wages control, property rights, legislation, black market operations). In this search , the researcher try to test the effect of variables of Economic Freedom on the investment climate in the two Arab states ( Bahrain and Tunisia ). The research found that the estimated regression equation of the State of Bahrain match with economic theory, which shows that there is a positive relationship between FDI flows and local concern in lifting components of the Index of Economic Freedom, all the signs are positive except freedom corruption (fc), and when you review the data, found that this indicator in the State of Bahrain began to decline during the years 2005-2010 , which indicates high rates of financial corruption slightly from previous years for the period mentioned . As regards the State of Tunisia has matched estimate the regression equation with economic theory as well, which means that there is a positive relationship between FDI flows and local concern in the lifting of the components of the index of economic freedom , except government spending because it settled at the its level and other variables that settled in the first difference . | ||
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