Interaction Between FDI, Institutional Quality, Pandemic and Economic Growth Inthe Mena Region: Application On Dynamic Panel Data (GMM)

Abstract

The objective of this work is to study the interaction between four different indicators namely FDI, institutional quality, pandemic and economic growth. In other words, this paper presents the effects of institutional quality in a pandemic context on the attraction of FDI to stimulate economic growth while showing the types of FDI that can be attracted during the period 2011-2020. The latter is characterized by two types of the pandemic namely the Ebola epidemic in Africa and the Covid-19 epidemic in Asia. Our empirical contribution is based on dynamic panel data (GMM) using the Arellano and Bond (1998) approach. The results found validate the hypothesis that institutional quality is the engine of economic growth. In addition, among the main results found when the interpretation has serious and clarifieted the implications for countries just below the threshold of institutional quality. Any reform in the area of democratic accountability, the quality of the bureaucracy, ethnic or military tensions in politics is likely to result in a gradual increase in the benefits of FDI, even for countries well below the threshold. However, due to institutional complementarities, reforms targeting specific characteristics of institutional quality may in fact bring other characteristics of their relevance closer together to show this work focused on institutional quality to attract FDI to stimulate growth in a context of the epidemic.