International Journal of Academic Research in Business and Social Sciences

search-icon

The Effects of Various Regional and Global Integration Indices on Foreign Direct Investment (Case Study: OPEC Countries)

Open access
Economic integration at global and regional level is one of the most important consequences of mutual relationships of countries. Given that capital is the stimulant of economic growth and development and developing countries are often faced with lack of capital, they are trying to compensate this with foreign borrowing but regarding crises resulted from it foreign direct investment is being used as its substitute. The main objective of this paper is to study the effect of economic integration and globalization on FDI attraction. In order to achieve the above goal foreign direct investment equation for Asian countries is estimated by Stata software using panel data during 2001-2011 based on theoretical literature of gravity model and using of econometric methods. Our results, as we expected reveal that there is a positive relation between economic integration and foreign investment. Comparison of results in different cases shows that co-integration has more impacts on FDI for OPEC Countries under globalization conditions. In globalization cases, integration is the best choice for attracting of FDI in OPEC.