Exploring the determinants and constraints of foreign direct investment inflows in Algeria
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Date
2024
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University of Oum El Bouaghi
Abstract
Algeria has been encouraging foreign direct investment (FDI) through several programs and incentives’ packages; however, the level of inward FDI is very fluctuating compared to other African countries. Therefore, this study tried to analyze the main determinants and impediments of FDI inflows to the country from a firm-level perspective. Foreign companies in Algeria were surveyed to achieve this objective. The study's empirical findings demonstrate that the availability of natural resources, the domestic and regional market opportunities, the availability of cheap labor and the political and social stability, were among the main determinants of FDI. In contrast, the 49/51 rule, the delays in licenses and work permits, the lack of clear policies and regulatory impediments and the corruption were identified as the main factors that have the potential to deter foreign investment in Algeria.
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Keywords
FDI; Determinants; Obstacles ; Algeria