The Effect of Economic Integration on FDI "The Empirical Study of D8 Countries"

Abstract

Toward the different economic integration and Commercial regional arrangements, which are the small scale of globalization, could relative advantage and put on the new opportunity on the national economies. These fact causes to the Developing countries open their markets to attract FDI and reduce their restriction on tariff and non tariff, which can increase international trading at the same time. With this important item, this study inquiry the effect of economic integration and globalization on the FDI, by specifying gravity model and panel data approach, for D8 member, during 2001 to 2011. Our Gravity model estimate show: the direct integration between member states D8 has positive and significant effect on foreign direct investment inflow.