The relationship of institutional quality to bringing foreign direct investment into Algeria for the period (1996-2018)

Abstract

The study aims to measure the extent of the impact of the quality of institutions in bringing foreign direct investment to Algeria  during the period (1996-2018), based on two independent variables to measure the institutional quality. They are: the economic freedom index, which reflects the economic institutional quality and the governance index that reflects the political institutional quality. The dependent variable is represented in the inflows of foreign direct investment relative to the gross domestic product. It was found that there is a positive, statistically significant relationship between the quality of the institutions, both economic and political, and the flows of foreign direct investment to Algeria in the long term, by applying the ARDL model.