The macroeconomic determinants of outward foreign direct investment: the case of Kuwait

This paper examines the home country macroeconomic determinants of kuwait’s outward foreign direct investment (ofdi) using country level time series data for kuwait over the period (1976-2011). also,a comparison is conducted between the trends of the factors determining ofdi in kuwait,saudi arabia,and norway as counterparts of developing and developed oil producing countries. the estimated models are examined using johansen cointegration test,as well as error correction technique and granger causality test. the study finds that the main macroeconomic determinants of kuwait’s ofdi are interest rate,inward foreign direct investment (ifdi),and public expenditure. the comparison shows that the trend of kuwait’s determinants of ofdi is partially consistent with the trend in norway. also,granger causality tests show that ofdi in the three countries follows the hypothesis of ifdi-led ofdi. © 2017,statistical economic and social research and training centre for islamic countries. all rights reserved.