IDEAS home Printed from https://ideas.repec.org/a/pkp/josere/v11y2024i4p416-434id3979.html
   My bibliography  Save this article

The determinants of foreign direct investment in conflict-prone environments: A case study of Palestinian territories

Author

Listed:
  • Mohammad Aref Mohammad Ibrahim

Abstract

The purpose of this paper is to investigate the complex relationship that exists between foreign direct investment (FDI) and armed conflict intensity, specifically in the Palestinian territories during the ongoing conflict with Israel. It examines various determinants, including market size, trade openness, labor cost, inflation, infrastructure, and fixed capital formation. Using available quarterly data from Q1 2010 to Q3 2023 and using EViews 13 software, the study adopted the Autoregressive Distributed Lag (ARDL) estimating model approach. The study concludes that the intensity of the armed conflict has a conclusive negative impact on the volume of foreign direct investment flow to Palestinian territories. It was also found that market size, trade openness, and gross capital formation are the main determinants contributing to the inflow of FDI and mitigating the negative impact of armed conflicts. Additionally, the study reveals that escalating conflict and Israeli occupation severely limit infrastructure access, contributing to its degradation and hindering foreign direct investment. It recommends that policymakers in conflict-affected areas prioritize peacebuilding and implement risk-reduction strategies to enhance political stability, promote GDP growth, increase trade openness, and improve infrastructure.

Suggested Citation

  • Mohammad Aref Mohammad Ibrahim, 2024. "The determinants of foreign direct investment in conflict-prone environments: A case study of Palestinian territories," Journal of Social Economics Research, Conscientia Beam, vol. 11(4), pages 416-434.
    • Handle: RePEc:pkp:josere:v:11:y:2024:i:4:p:416-434:id:3979
    as

    Download full text from publisher

    File URL: https://archive.conscientiabeam.com/index.php/35/article/view/3979/8350
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pkp:josere:v:11:y:2024:i:4:p:416-434:id:3979. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dim Michael (email available below). General contact details of provider: https://archive.conscientiabeam.com/index.php/35/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.