Khaled Elmawazini[1]
Assistant Professor of Economics, Gulf University for Science and Technology
The paper differs from previous studies in two aspects. The first aspect is that the paper focuses on the impact of spillovers from FDI on labor productivity growth in GCC countries. Previous studies focus on the impact of FDI on economic growth in GCC countries. The second aspect is that this study relates the impact of FDI on productivity growth in GCC countries to FDI theories. To investigate the hypothesis that FDI inflows yield positive productivity spillovers to GCC countries, the macroeconomic and microeconomic FDI theories and previous empirical studies are reviewed, host country absorptive capacity measures are identified. In addition, we empirically examine the impact of spillovers from FDI on productivity growth in GCC countries using dynamic panel data. The main finding of dynamic panel data regressions shows that FDI inflows yield weak and negative productivity spillovers to GCC countries. This result is consistent with resource curse phenomenon and Rybczynski theorem.
Keywords: Foreign Direct Investment, Spillovers, Productivity growth, GCC countries
[1] Corresponding author. Address: 23 Du Sillon, Gatineau, Quebec, J8Z 2Y7 Canada. E-mail : k.elmawazini@alumni.uottawa.ca