Impact of Financial Development on Foreign Direct Investment in Algeria during the Period 1996 – 2018

Abstract

This study aims to measure the impact of financial development on foreign direct investment in Algeria, through an econometric study of annual data using a modern approach in analyzing cointegration and error correction, represented by the autoregressive distributed lag model (ARDL) during the period 1996-2018. The study found that there is long-term equilibrium relationship between financial development and foreign direct investment. The results show that the financial development has a significant positive short and long- run effect on foreign direct investment.