Greenfield FDI Determinants in the MENA Region
The purpose of the chapter is twofold. Firstly, the authors intend to identify the main determinants of Greenfield FDI in a context of political and economic changes by choosing inflation, trade freedom, and investment freedom as macroeconomic variables and political instability as an institutional variable. Secondly, they determine which environmental sector may affect this mode of foreign investment in MENA region. Using dynamic panel models on a sample of 13 countries over the period 2010-2018, they perform econometric modeling to measure the relationship between Greenfield FDI, macroeconomic aggregates, and the relationship between FDI and the environmental sector. They find that trade openness stimulates foreign investment in MENA region and that the lack of inflation control may disrupt the inflow of Greenfield FDI since it reflects the economic stability of the host countries. Furthermore, there is a positive relationship between Greenfield FDI and environmental sectors. The chapter suggests some relevant practical implications to improve the attractiveness of Greenfield FDI in the MENA region.