Abstract

The study aims to examine the location drivers and barriers influencing the foreign direct investment (FDI) in the hotel sector in selected Middle Eastern and North African (MENA) countries. Data of study variables was selected from fDi Intelligence, Euromonitor International, World Economic Forum, and Datamonitor. Findings indicated a significant correlation of investor, quality, rule and law, infrastructure quality, corruption, politics, government effect, gross domestic product (GDP) growth, total tax rate, and real export GDP with FDI. However, FDI inflows were significantly determined by the level of investment freedom, investor protection, and political stability. The study concluded that investment freedom, market size, and stability of the country revealed the anticipated signs.

Highlights

  • Middle Eastern and North African (MENA) countries consist of a group of Middle Eastern and North African countries that are characterized as economically diverse regions

  • Findings obtained from the econometric analysis of hotel foreign direct investment (FDI) inflows have shown that hotel sector-specific variables and country-specific factors are influencing the FDI inflows in MENA countries, though the findings of the study are somewhat unsupportive

  • Hotel FDI values are insignificant for FDI flows for the selected MENA countries, whereas investment freedom, market size, and stability of the country revealed the anticipated signs

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Summary

Introduction

Middle Eastern and North African (MENA) countries consist of a group of Middle Eastern and North African countries that are characterized as economically diverse regions. Iran, and Turkey are the countries with the largest populations among MENA countries in terms of population size. GDP rate of Turkey is the largest, whereas Bahrain has the smallest GDP in terms of economic size. Jordan, Bahrain, Sudan, and Lebanon have the highest net of foreign direct investment (FDI) inflows, while Yemen, Syria, and Iran have the lowest net of FDI inflows in terms of GDP percentage [1]. A major challenge for resource-poor countries is represented from high inflation, importing meaningful accounts of fuel and food, while major resources of rich countries in the region are lacking. Turkey, Sudan, and Iran comprise the highest consumer price, whereas Bahrain, Saudi Arabia, Libya, and Morocco accounted the lowest consumer price in terms of the rate of inflation [2]

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