Governance and FDI in MENA Region

This paper uses annual aggregate data for 16 countries in Middle East and North Africa (MENA) region for the period 2002-2007 to determine the impact of a better quality or so-called good governance on foreign direct investment (FDI). We have used three governance indicators namely, political stability, control of corruption, and rule of law values published by the World Resources Institute Our findings regarding political stability and control of corruption based on panel regression analysis support that better governance has a positive impact on FDI inflows into the MENA countries. Therefore, policies to improve governance indicators in the region are suggested