Foreign direct investment in emerging countries: attractiveness and economic effects.

Summary The objective of this thesis is to study the growth and economic development of emerging countries through Foreign Direct Investment. Emerging countries adopt strategies to attract FDI, which then promotes the assimilation of the technological transfers they carry. These strategies are based on several points: increased regulation, establishment of a system of good governance, strengthening of macroeconomic stability, and development of infrastructure and human capital. We focus on MENA countries that have recently undergone profound political and social changes. These are countries that Western Europe would benefit from accompanying, to ensure the success of this transitional phase. This is why we take the example of the CEEC countries after the fall of the Berlin Wall and the Western European countries after the Second World War. From the 1980s onward, following the collapse of oil prices, which had major consequences on their fragile economies, MENA countries tried to diversify their economies. In the first chapter, we show the nature of the channels through which the effects of FDI on the growth of emerging countries are realized. According to recent theories of economic growth, the policies of attracting FDI carried out by emerging countries constitute a driving force for growth, as long as these countries possess human capital capable of absorbing the technologies and know-how conveyed by FDI. In the second chapter, we use various empirical methods to establish the determinants of FDI. Using regional comparisons, we focus, in particular, on the short-term institutional determinants. Based on a gravity model in the third and fourth chapters, we then highlight the key determinants of FDI in Central and Eastern European countries (CEE), as well as possible differences in the behavior of foreign investors towards the former EU-15 and the CEE countries, ten years after the enlargement of the European Community. We thus show a shift both in the geographical orientation of investors and in their motivations. We therefore do not observe a convergence of the determinants of the CEECs towards those of the EU-15. On the other hand, the effect of tax competition tends to spread in the strategies of firms from the CEEC to the whole of the European Union. This coincides with the onset of the crisis, which has led to greater volatility in FDI flows. In the fifth chapter, we analyze the long-term institutional determinants of FDI in the MENA region. We highlight a range of institutional indicators to identify their relative importance on FDI flows after controlling for macroeconomic determinants. We take into account the effects of economic downturns, mainly due to recessions and economic crises. Our results indicate that institutional indicators are positively related to FDI. Finally, in the sixth chapter, and for the same region, we examine the relationship between economic growth, FDI, exports, labor force and capital investment. As this relationship remains one of the most important issues in the economic literature, it is receiving renewed interest, mainly for MENA countries, which suffer from social, economic, and technological problems. Using the ARDL approach, we finally show that there is a cointegration relationship between these variables, both in the long run and in the short run.