Date of Award

Spring 5-2020

Degree Type


Degree Name


Degree Program

Financial Economics


Economics and Finance

Major Professor

Kabir Hassan

Second Advisor

Arja Turunen-Red

Third Advisor

Walter Lane

Fourth Advisor

Selma Izadi


First chapter examines the link between FDI, trade, capital formation and economic growth in 12 MENA countries using panel analysis for yearly data between the period 2001 to 2017. Using cointegration and Hausman test, our results indicate that, all the variables are stationary at first level, and long run relationship exist between our variables. A model of endogenous growth highlight that MENA countries favored FDI to trade, where trade has negative relation with economic growth. Capital formation and labor has positive and significant relation. We also, address the relation of education level, as we know that increase in Education level will enhance the adoption of foreign technology. The results were consistent with our initial model. Furthermore, we answered the question of whether FDI is a complement or substitute? Our result show that FDI has negative relation with stock market. In other words, FDI is a substitute not a complement to stock market. FDI is positively correlated with stock market liquidity, saving, GDP and political stability.

Second chapter explores the long run demand for money and its stability for MENA countries for the period of 2002 to 2016 using annual data. By applying panel cointegration approach, the result reveals evidence of cointegration between the variables in the long run. Therefore, an error correction (ECM) is applied to determine the factors that influence real money aggregate(M2). The result show that, export and import have positive and negative effect respectively, increase in exporting will increase the value of the currency, and the opposite is true. Further, all the variables have significant effect in the long run, while GDP affect the demand for money in the short run. The CUSUM test of paraments stability show that money demand function is mostly stable over the period. At individual level, the result change from county to another.


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