A New Composite Measure of FDI Attractiveness: Global FDI Country Attractiveness (GFICA) Index

Drawing out the main conclusions from the theoretical and empirical literatures, the aim of our modest contribution is to provide an explanation of why some countries are more attractive for foreign investors than others and what underlies the relative attractiveness failure of some countries. Therefore, a composite index that adequately describes a host country's attraction for FDI is constructed. This index, henceforth referred to as "GFICA Index", considers all identified foremost, measurable and comparable aspects that affect FDI decision. The index, ranking a set of 111 countries, representing 92% and 95% of the world inward FDI flows and stocks respectively, according to their attractiveness for receiving inward FDI, is structured so as to provide the possibility of conducting detailed strength and weakness analyses for countries in general and Arab countries in particular> Indeed, 18 Arab countries are part of the sample representing more than 95% and 98% of the total inward FDI flows and stocks into the Arab region respectively. These analyses can be used by policy-makers to draw conclusions on how to improve the country's attraction for inward FDI.