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Causality between Domestic Investment and Economic Growth in Arab Countries

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  • Bakari, Sayef
  • El Weriemmi, Malek

Abstract

The aim of this investigation is to examine the nexus between domestic investment and economic growth in Arab countries. To attempt our goal, we used annual data for the period 1990 – 2020 and Vector Error Correction Model. Empirical analysis indicates that there is no relationship between domestic investment and economic growth in the long run. However, we find a bidirectional causality between domestic investment and economic growth in the short run. These results provide evidence that domestic investment is necessary in Arab countries’ economy and is presented as an engine of growth since they cause economic growth in the short term. But they are not carried out and treated with a solid and fair manner, which offer new insights into Arabe countries’ investment policy for promoting economic growth.

Suggested Citation

  • Bakari, Sayef & El Weriemmi, Malek, 2022. "Causality between Domestic Investment and Economic Growth in Arab Countries," MPRA Paper 113079, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:113079
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    References listed on IDEAS

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    11. Mkadmi, Jamel Eddine & Bakari, Sayef & Msai, Achwak, 2021. "Assessing the Impact of Tax Policies on Economic Growth in Tunisia: New Empirical and Policy Analysis," MPRA Paper 109023, University Library of Munich, Germany.
    12. Najeh Bouchoucha & Sayef Bakari, 2021. "The Impacts Of Domestic And Foreign Direct Investments On Economic Growth: Fresh Evidence From Tunisia," Journal of Smart Economic Growth, , vol. 6(1), pages 83-102, Mars.
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    17. Mounir Dahmani & Mohamed Mabrouki & Adel Ben Youssef, 2022. "The Information and Communication Technologies-Economic Growth Nexus in Tunisia - A Cross-Section Dynamic Panel Approach," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 18(2), pages 161-174.
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    21. Dahmani, Mounir, 2021. "Impact de la diversification des exportations sur la croissance économique: Cas de la Tunisie [Impact of export diversification on economic growth: case of Tunisia]," MPRA Paper 112225, University Library of Munich, Germany, revised 2021.
    22. Othmani, Abdelhafidh & Bakari, Sayef & Slimani, Slah, 2015. "Impact Direct et Indirect de la Corruption sur le Commerce Extérieur en Tunisie : Étude Descriptive [Direct and Indirect Impact of Corruption on Foreign Trade in Tunisia: Descriptive Study]," MPRA Paper 80926, University Library of Munich, Germany.
    23. Bakari, Sayef, 2018. "The Impact of Domestic Investment on Economic Growth New Policy Analysis from Algeria," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 3(1), pages 35-51, March.
    24. Muhammad Javid, 2019. "Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis," Sustainability, MDPI, vol. 11(12), pages 1-22, June.
    25. Mohsin S. Khan, 1996. "Government Investment and Economic Growth in the Developing World," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(4), pages 419-439.
    26. Bakari, Sayef & Benzid, Lamia, 2021. "Modeling the Impact of Corruption, Degree of Freedom to Invest and Democracy on Domestic Investment: Evidence from MENA Countries," MPRA Paper 108385, University Library of Munich, Germany.
    27. Sayef Bakari & Abdelhafidh Othmani & Mohamed Mabrouki, 2021. "Pollution And Economic Growth: A New Vision For The Tunisian Economy," Journal of Smart Economic Growth, , vol. 6(2), pages 1-17, September.
    28. Sayef Bakari & Mohamed Mabrouki, 2017. "The Effect Of Agricultural Exports On Economic Growth In South-Eastern Europe: An Empirical Investigation Using Panel Data," Journal of Smart Economic Growth, , vol. 2(4), pages 49-64, December.
    29. Bakari, Sayef & Fakraoui, Nissar & Mabrouki, Mohamed, 2020. "The Contribution of Domestic Investment, Exports and Imports on Economic Growth: A Case Study of Peru," MPRA Paper 99041, University Library of Munich, Germany.
    30. Bakari, Sayef, 2021. "Are Domestic Investments in Spain a Source of Economic Growth?," MPRA Paper 105526, University Library of Munich, Germany.
    31. Mounir Dahmani & Mohamed Mabrouki & Adel Ben Youssef, 2021. "The ICT, Financial Development, Energy Consumption and Economic Growth Nexus in MENA Countries: Panel CS-ARDL Evidence," GREDEG Working Papers 2021-46, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
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    Cited by:

    1. Ben Yedder, Nadia & El Weriemmi, Malek & Bakari, Sayef, 2023. "The nexus between domestic investment and economic growth in MENA countries; Do Patents matter?," MPRA Paper 118174, University Library of Munich, Germany.
    2. El Weriemmi, Malek & Bakari, Sayef, 2024. "Impacts of Agricultural Exports and CO2 Emissions on Economic Growth: New Evidence from High Income Countries," MPRA Paper 121888, University Library of Munich, Germany.
    3. Bakari, Sayef, 2024. "Assessing the Impact of Domestic Investments and CO2 Emissions on Economic Growth in Sub-Saharan Africa: A Comprehensive Study (1990-2022)," MPRA Paper 120370, University Library of Munich, Germany.
    4. Othmani, Abdelhafidh & Ben Yedder, Nadia & Bakari, Sayef, 2023. "The Cointegration Relationship between Patent, Domestic Investment and Economic Growth in United States of America," MPRA Paper 118245, University Library of Munich, Germany.
    5. Bakari, Sayef, 2022. "The Nexus between Domestic Investment and Economic Growth in Developed Countries: Do Exports matter?," MPRA Paper 114394, University Library of Munich, Germany.
    6. Ben Yedder, Nadia & El Weriemmi, Malek & Bakari, Sayef, 2023. "Boosting Economic Growth in Angola: Unveiling the Dynamics of Domestic Investments and Exports," MPRA Paper 119480, University Library of Munich, Germany.
    7. Bakari, Sayef & El Weriemmi, Malek, 2022. "Exploring the Impact of Agricultural Investment on Economic Growth in France," MPRA Paper 113970, University Library of Munich, Germany.
    8. Najwa AKERMI & Nadia Ben YEDDER & Sayef BAKARI, 2024. "Impact of final consumption, domestic investment, exports, and imports on economic growth in Albania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(638), S), pages 231-252, Spring.
    9. Nadia Ben Yedder & Malek El Weriemmi & Sayef Bakari, 2023. "The Impact of Domestic Investment and Trade on Economic Growth in North Africa Countries: New Evidence from Panel CS-ARDL Model," EuroEconomica, Danubius University of Galati, issue 2(42), pages 22-41, November.
    10. Bakari, Sayef, 2023. "The nexus between domestic investment and economic growth in MENA countries; Does unemployment matter?," MPRA Paper 118349, University Library of Munich, Germany.
    11. Bakari, Sayef, 2022. "The Impact of Natural resources, CO2 Emission, Energy use, Domestic Investment, Innovation, Trade and Digitalization on Economic growth: Evidence from 52 African Countries," MPRA Paper 114323, University Library of Munich, Germany.
    12. Bakari, Sayef, 2022. "Relationship among Domestic Investment, Exports and Economic Growth: Evidence form the Case of Greece," MPRA Paper 114418, University Library of Munich, Germany.
    13. Bakari, Sayef, 2024. "Link among Domestic Investments, Exports and Economic Growth: New Evidence from Australia," MPRA Paper 121604, University Library of Munich, Germany.
    14. Bakari, Sayef, 2024. "Causality between Domestic Investment and Economic Growth: New Evidence from Argentina," MPRA Paper 121799, University Library of Munich, Germany.

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    More about this item

    Keywords

    Domestic Investment; Economic Growth; VECM; Arab Countries;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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