The impact of foreign direct investment on GDP and inflation in the Iraqi economy: a comparison with selected countries in the Middle East

الملخص

Interest in foreign direct investment started recently from developed and developing countries alike, and economists became more interested in it and published many studies. This study examines the relationship between foreign direct investment, GDP and inflation, as determining factors for attracting this investment to the Middle East in general and to Iraq in particular.

The data source is the World Bank's World Development Indicators, last updated: 01/07/2020, and the United Nations Conference on Trade and Development, last updated: 07/01/2020. The study covers the years from 1960-2019.

The VAR plate test, the Fisher unit root test, and the enhanced Dickey-Fuller tests were used to analyze the study data. Also, use  Granger's causal test father, the series has been stable. The results of the tests were not strong, as the effect of foreign direct investment was absent or weak on GDP, inflation.

The null hypothesis Ho is rejected, as the probability value is zero in more than one condition. Concerning the causality test, the results showed that there was no effect or relationship between foreign direct investment and GDP, and the relationship between foreign direct investment and inflation was causal in one direction, from inflation to foreign direct investment.

Finally, it can be seen that the results were in most cases inconsistent with the previous literature, as the results of this literature concluded that foreign direct investment positively affects GDP, economic growth, and negatively affects inflation.