Impact of Transparency of Trade Policies on Foreign Direct Investment: Evidence from the Middle East

The foreign direct investment is one of the factors affecting capital markets in different countries. Improvements in capital market and facilitate in the investment situation are one of the factors affecting countries’ economic growth path. In the recent economic literature, transparency is regarded as an important issue that influences foreign capital inflow into countries. For this reason and because the Middle East is formed by developing countries and so FDI has a great importance in this area. This paper studies the influence of transparency on FDI in these countries. Transparency involves a country's situation in terms of property right, the size of corruption and efficiency of the judicial system. The data that are examined within this study covers the period 2000-2015. The results indicate that transparency has a positive impact on the foreign direct investment in these countries, meaning that rising transparency increases FDI in these countries.