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Foreign Direct Investment in GCC Countries: The Essential Influence of Governance and the Adoption of IFRS

Author

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  • Costas Siriopoulos

    (College of Business, Zayed University, Abu Dhabi 144534, United Arab Emirates)

  • Athanasios Tsagkanos

    (Department of Business Administration, University of Patras, 26504 Patras, Greece)

  • Argyro Svingou

    (School of Social Sciences, Hellenic Open University, Parodos Aristotelous 18, 26335 Patras, Greece)

  • Evangelos Daskalopoulos

    (Department of Management Science and Technology, University of Patras, 1 Megalou Alexandrou Str., 26334 Patras, Greece)

Abstract

This paper presents an analysis of the factors affecting foreign direct investments, focusing on governance quality and adoption of International Financial Reporting Standards on countries of the Gulf Cooperation Council, which are a special case of study due to their idiosyncratic characteristics, rich natural resources and geographical position. Panel data analysis was conducted, implementing three different models (Fixed Effect, Random Effect, and Arellano Bond Dynamic Model). The results show that the adoption of International Financial Reporting Standards is a strong determinant that promotes foreign direct investments. As regards the governance quality, the block of Gulf Cooperation Council countries has fulfilled the minimum level of governance pre-conditions relative to foreign direct investments. In addition, governance indicators associated with law, rules, and corruption are more influential determinants for foreign direct investments.

Suggested Citation

  • Costas Siriopoulos & Athanasios Tsagkanos & Argyro Svingou & Evangelos Daskalopoulos, 2021. "Foreign Direct Investment in GCC Countries: The Essential Influence of Governance and the Adoption of IFRS," JRFM, MDPI, vol. 14(6), pages 1-13, June.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:6:p:264-:d:572614
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