Factors Influencing Economic Complexity in MENA Countries: The Role of Internet Development, Financial Development, and Foreign Direct Investment

Oskou, Vahid; Mohammadi Khyare, Mohsen

doi:10.48301/kssa.2023.385768.2452

Factors Influencing Economic Complexity in MENA Countries: The Role of Internet Development, Financial Development, and Foreign Direct Investment

Document Type : Original Article

Authors

vahid oskou

mohsen mohammadi khyare

Administrative and Economic Science Iran

10.48301/kssa.2023.385768.2452

Abstract

This study examines the impact of Internet development, financial development, and foreign direct investment on economic complexity, which is defined as a country's production capabilities and is represented by the Economic Complexity Index (ECI). Since ECI seeks to explain the accumulation of knowledge in economic activities, this indicator is often used as a predictor for economic growth as well. By analyzing a panel consisting of 12 selected MENA countries, in the period of 2008-2020, the empir-ical results showed that for MENA countries, financial development and access to the Internet contribute to increasing economic complexity, while investment inflows Foreigners have not had an impact due to the absorption of lower technology in these countries. Also, by examining the mutual influence of variables, the results showed that the impact of foreign investment on economic complexity depends on institutional quality. In addition, the impact of financial development and access to the Inter-net in the presence of the quality of institutions has a greater impact on economic complexity

Keywords

economic complexity

access to the Internet

foreign investment

financial development

MENA

Subjects