Which foreign direct investments are most affected by political instability? Analysis of quarterly greenfield investment flows into countries in the Middle East and North Africa during the period from 2003 to 2012 shows that adverse political shocks are associated with significantly reduced investment inflows in the non-resource tradable sectors. By contrast, investments in natural resource sectors and non-tradable activities appear insensitive to such shocks. Political instability is thus associated with increased reliance on non-tradables and aggravated resource dependence.
Keywords: F21; F23; O13; O16; P48
Journal Article. 10160 words. Illustrated.
Subjects: International Factor Movements and International Business ; Economic Development ; Other Economic Systems
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