Anchors of Economic Growth

Nations constantly strive to achieve economic growth. But, with the MENA region struggling relative to the world to achieve growth it is important to identify the anchors of growth. A primary tool used to achieve economic growth is Foreign Direct Investment. But, FDI is influenced by an array of elements including the purpose of the firm’s investment, whether it is market seeking, resource seeking, or efficiency seeking. This can be portrayed using various historical theories including the product life cycle, eclectic theory, market imperfections theory, and market powers theory. More, importantly these theories are broad concepts, which are based on macroeconomic factors influencing FDI. A random effects panel data study was conducted to identify the determining factors of FDI inflow into the MENA region. Based on this study's findings MENA region nations should strive to utilize these determinants to improve the competitive environment and attract FDI flow. Thus, ultimately leading to the removal of the anchors of economic growth.