oreign Direct Investment and Economic Growth in Kuwait

Abstract

There is a strong belief that foreign direct investment has positive effects on host countries by providing jobs, training, technology transfer, licensing agreements, creating links between foreign and domestic companies, as well as direct capital financing, thereby boosting the economic growth of any country. Moreover, other factors push developing countries to try to attract foreign direct investment. This result is not absolute because some studies indicate that the ability of a country to benefit from the process of attracting foreign direct investment may be affected by many internal factors, including the level of education and the availability of skilled labour, the development of financial markets. Some studies also indicate a negative impact of foreign investment flows at the level of the local economy. This paper attempts to clarify the relationship and explore the direction of interaction between FDI and economic growth in Kuwait for the period 2000-2016 and to determine whether the impact of investment flows negatively or positively on economic growth using a range of economic variables and using the program EViewes to perform calculations by regression analyses. The study showed that there is no relationship between foreign direct investment and economic growth in both directions and there is a positive relation between GDP and some other variable and with non-relation with inflation.