THE IMPACT OF PRIVATE CAPITAL FLOWS ON ECONOMIC GROWTH IN THE MENA REGION

The aim of the article is to conduct an empirical analysis of the impact ofaggregate and disaggregate private capital flows on economic growth in eleven MENAcountries between 1980 and 2018. Unlike prior empirical studies, the fixed effect panelquantile approach developed by Canay (2011) is implement...

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Bibliographic Details
Published inEconomics and business review Vol. 6; no. 3; pp. 45 - 67
Main Authors Ben-Salha, Ousama, Zmami, Mourad
Format Journal Article
LanguageEnglish
Published Poznań University of Economics and Business Press 01.08.2020
Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu
Sciendo
Subjects
C21
economic growth
Economy
F21
F43
fixed effect panel quantile
MENA
private capital flows
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Summary:The aim of the article is to conduct an empirical analysis of the impact ofaggregate and disaggregate private capital flows on economic growth in eleven MENAcountries between 1980 and 2018. Unlike prior empirical studies, the fixed effect panelquantile approach developed by Canay (2011) is implemented. Findings suggestthat there is a significant difference in the effects of private capital flows on economicgrowth across lower and higher quantiles. More specifically, the effects of total privatecapital flows, foreign direct investment flows, portfolio flows and debt flows are positiveand statistically significant only for low and medium quantiles, indicating thatthe enhancing impact of private capital flows in terms of economic growth is onlyconfirmed in countries with relatively low and medium growth rates. Moreover, debtflows affect economic growth in countries recording high growth rates, stressing theimportance of financial development in routing those flows into the most productiveprojects in the economy.
ISSN:2392-1641
2450-0097
DOI:10.18559/ebr.2020.3.3