Abstract
In recent years, the changing economic and political environment in Tunisia led to a renewed interest on the drivers of foreign direct investment, given its potential important gains. In this study, we investigated the impact of various factors over the period 1980-2012. In doing this, three categories of determinants were considered: economic, political and sociocultural variables. Empirical findings drawn from the autoregressive distributed lag bounds testing approach show that variation in foreign direct investment inflow in the short-run and long-run is affected by the majority of variables considered, except exchange rate, urban population and gross domestic savings. As a matter of policy, it is essential that government should continue its efforts to create a macroeconomic environment which is attractive to foreign direct investment.
Highlights
It is well known theoretically and practically that foreign direct investment (FDI) enhances employment, technology transfer and productivity which promote economic growth (De Mello, 2007)
This paper attempts to respond to the question: What macroeconomic factors matter as determinants of FDI inflow in Tunisia? In line with earlier studies, our paper takes a close look at how robust is the relationship between FDI and its determinants, but with some differences
This paper examined the relationship between macroeconomic environment and FDI inflow for Tunisia over the period 1980–2012
Summary
It is well known theoretically and practically that foreign direct investment (FDI) enhances employment, technology transfer and productivity which promote economic growth (De Mello, 2007). The manifestation of revolution in the late 2010s and early 2011s made the authority to change their attention among others toward the attractiveness of his territory: increasing effort toward attracting foreign direct investment becomes a key government priority Against this background, this paper attempts to respond to the question: What macroeconomic factors matter as determinants of FDI inflow in Tunisia? With respect to the case of Tunisia, studies that tried to investigate the determinants of FDI inflows are very few (Lahimar, 2006; Driss, 2007; Karry & Toumi, 2007; Toumi, 2009). This means that the question remains unresolved. Some policy conclusions are drawn and directions for future research in this area are suggested
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