Foreign Direct Investment As A Key Driver For Export In Algeria: Complements Or Substitutes' - Gravity Model Analysis

In view of the extended role of FDI in the economic growth, an analysis of impact of FDI on different economic variables has received global attention. The analysis of impact of FDI on exports of a host country is one such aspect being widely explored by the research scholars as well as different economic organizations. This paper examines the impact of FDI on exports of Algeria at macro level (Substitutes or complements) using econometric techniques (expanded Gravity Model). In the study special attention has been paid to select the most appropriate time series data to minimize the likely distortions resulting from political and economic instabilities in the country. The results provide statistically significant evidence of the positive impact of FDI on exports of Algeria.