FDI and economic growth in the GCC: does the oil sector matter?

This paper investigates the impact of sectoral foreign direct investment (FDI) on economic growth by validating resource curse hypothesis in Gulf Cooperation Council (GCC) countries. Applying OLS (Fixed and Random effects), Instrumental Variables (IV) Limited Information Maximum Likelihood (LIML) estimations, empirical results indicate that resource-FDI inflows hinder GCC economies, while non-resource FDI has an insignificant effect growth. Moreover, total Greenfield deter economies. These give evidence crowding-out resource-FDI. opens new insights for policymakers designing a comprehensive policy (resource non-resource) attaining sustainable development long run.