How Foreign Direct Investment and Other Belt and Road Initiative Aspects Shape Sustainable Economic Development in Middle East Nations

Abstract

Belt and Road Initiative (BRI) aspects, i.e. open trade (OT), foreign direct investment (FDI), capital formation, and information and communication technology (ICT) exports, are fundamental for any nation’s sustainable Economic Development (ED). The paper seeks to examine the effect of those aspects on the ED of Saudi Arabia and other Middle East nations which participate in BRI. The study uses the yearly cross-sectional time-series data from 2013 to 2022. The dual-stage Generalized Method of Moments (GMM) is employed in the sample because the sum of parameters is smaller than the sum of moment clauses. The findings reveal that capital formation and FDI significantly and positively affect the ED, while OT and ICT exports negatively and insignificantly affect it. The general findings show that China’s external FDI has increased the ED in Saudi Arabia and other Middle East nations whereas OT shows an insignificance as the majority of emerging nations should capitalize industrial development and hearten export expansion. This study is an initial effort to examine the relationships among BRI aspects and sustainable ED in Middle East Nations using the GMM method.